The explosion of data, whether social media, transaction data, mobile or other types of unstructured data, through numerous digital and print channels, is making financial information management really challenging. But the centralization of all data streams and having a ‘golden copy’ turns the burden of managing data into information and brings competitive advantages.
When it comes to financial institutions, integrating well thought-out, relevant content into an institution’s workflow helps to make the right decisions not just regarding (new) client relationships, but also a bank’s product and business development. With increasingly onerous KYC & AML regulations banks need an efficient approach. Alacra, the Opus KYC and reference data platform, optimizes banks’ business processes by collecting, normalising and cleansing data.
Financial IT met with Steve Goldstein, the New York-based CEO of Alacra, to discuss the critical importance of a single, comprehensive view of client-related information both for individuals and companies.
“We have been a trusted partner to financial institutions for 20 years. Most of our clients are Tier-1 banks in New York and London. The core competency of Alacra is in content aggregation. We have relationships with the major financial publishers, including LexisNexis, Dow Jones, Dun & Bradstreet, Moody’s, S&P, Fitch as well as dozens of niche data providers. By aggregating and normalising all the disparate sources of information Alacra’s compliance solutions accelerate on-boarding, periodic and event driven reviews and help banks meet global KYC and AML regulations.”
A single view of client data makes it much easier and faster to analyse all the KYC information in order to make a client onboarding decision, and to determine a risk classification. Another advantage of using Alacra for banks is a complete and accurate view of a legal entity.
“As big consumers of data banks rely on information from many data providers,” continues Goldstein. “A big challenge is bringing these content sets together. Because Alacra has so many data sources and relationships with all the providers, we are uniquely positioned to map and cross-reference entity identifiers used by publishers and regulators to provide a single, clean source of information. This helps banks to create a single view of clients, reduce data silos within the bank, ensure accurate transaction reporting, clean up their CRM systems and, as is becoming increasingly important, to have a clean view of all the third parties they contract with. This tremendous ‘map’ allows banks to know the correct DUNS#, Orbis ID, FCA FRN number, LEI, Ticker, rating agency identifiers and more for any given entity. This means we can map any entity identifier onto another.”
Escalating issues in financial compliance and risk management
Unfortunately the financial services world today is going through a crisis of trust due to the increased risk of cybercrime, corruption and money laundering. The idea of privacy very often cuts across the concept of information transparency and enhanced client identification. Goldstein mentions the USA Patriot Act and other client onboarding regulations which banks have to meet to ensure the stability and security of the financial system, prevent illegal activities, money laundering, etc. Bank clients are also required to follow these standards for their own peace of mind. This is driving demand for solutions like Alacra Compliance Enterprise and Alacra Reference Data Solutions. In addition to sophisticated content integration Alacra’s products offer the benefits of SaaS, i.e. fast execution and cost savings. Goldstein notes that there is a significant positive shift in bankers’ perception of SaaS.
“All Alacra’s products are delivered using the SaaS model. Many of our reference data products are embedded in our clients’ businesses through digital delivery of files and data. Historically, banks have been cautious about utilizing software and services outside their firewalls, but we are now seeing a rapid change in that, with more widespread adoption of the cloud, which is viewed by many as offering greater security than the old-fashioned, ‘behind-the-firewall’ approach.”
“The ROI of using Alacra’s services is that you can accomplish much more with the same number of people, while ensuring consistent, auditable and defensible processing, so you get a significant rise in productivity. Also, in our KYC service, the process has been streamlined and standardized so that all the analysts who are doing KYC are essentially doing the same thing, i.e. using the same processes, as opposed to different people using different approaches and processes, which is a problem from regulatory, reporting and productivity perspectives. We solve these problems,” concludes Goldstein.