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Foreign Corruption Protection act (FCPA) Solutions

Companies face increased pressure to comply with the , making Know Your Customer (KYC) capabilities crucial. In 2016, $2.48 billion in penalties were assessed marking the biggest enforcement year in FCPA history.

Simply put, the cost is too high for firms to ignore FCPA risks.

The QuantaVerse FCPA solution…

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This solution reduces Transaction Monitoring System (TMS) false positive alerts by classifying the risk of each transacting party, down to the pseudo-client level.

In the vast majority of transaction messages, the transacting parties are ambiguous. This forces expensive manual intervention. QuantaVerse effectively resolves ambiguities and identifies the observables required to categorize risks associated with each transacting party.

Using these observables, QuantaVerse’s neural network employs a variety of auditable data science techniques and algorithms to accurately derive the client and pseudo-client risk segmentation. By solving both the data problem and the risk segmentation problem, QuantaVerse enables existing TMS rules and models to work as designed.

Our experience shows that between 20% and 40% of false positive alerts can be eliminated.

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The QuantaVerse Alert Investigator automates investigations required when an alert is produced by a TMS.

By replicating much of the human investigative process which analyzes entity, transaction, and intention (economic purpose) variables, up to 70% of the AML investigation can be successfully completed by QuantaVerse. In addition to handling alert investigations at much higher volumes and levels of consistency the results of investigations are made fully transparent through the QuantaVerse Financial Crime Report (FCR).

The QuantaVerse FCR meets regulatory and audit requirements for properly documenting, explaining, and detailing the activity investigated. It contains sections for recommended action, identified risk, subject(s) identification, dates of identified activity, account number(s), number of transactions, amounts, transaction details including dates, negative news, and an investigative narrative that conforms to regulatory and audit requirements as appropriate for Suspicious Activity Reports (SAR) and Suspicious Transaction Reports (STR).

If the platform determines that additional investigation/verification by a Level 3 or 4 investigator is necessary, the FCR will recommend that “Further Investigation is Required.” The platform may also conclude the alert does not constitute suspicious activity (i.e., it is a false positive) which the FCR will report as “No Further Investigation Required,” or that a SAR should be submitted indicated by “Report Recommended” by the FCR.

The intuitive QuantaVerse UI, allows investigators and analysts to drill down and view information regarding the transacting parties, the transactions, network visualizations, risk scores, and other relevant insights. Additionally, to support these recommendations for internal and regulatory audit purposes, the platform stores all evidences used in the determination, including negative news, sanctions, financial crime typologies, etc.

The Alert Investigator frees investigative resources to focus their time, skills, and talents on the most complex financial crime risks and investigations.

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The QuantaVerse False Negative Identifier examines non-flagged transactions for financial crime risks that have been missed by a Transaction Monitoring System (TMS).

Industry estimates are that up to 75% of financial crimes go unalerted and therefore uninvestigated and un-reported. These false negatives have the potential to cause significant risks to organization and their accountable employees.

If suspicious activity is detected, the QuantaVerse Alert Investigator solution is automatically initiated to create a Financial Crime Report (FCR) which includes supporting evidences and risk scores.

The False Negative module can query multiple years’ worth of related entity transactional data can be used QuantaVerse Third-Party Risk Management Below the Line (BTL) testing requirements by efficiently examining 100% of the BTL transactions.

QuantaVerse False Negative Identifier also recommends rules for catching new criminal behavior patterns uncovered during AI analysis. Through documented guidance on TMS rule scenarios and model tuning, we can improve the performance of financial institutions’ TMS, driving continuous improvement of their AML efforts over time.

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This solution enables risk managers to have better insight into the variances in account activity that might indicate risks of financial crimes or suggest that an account is being used for something other than its stated purpose. This type of analysis is a growing regulatory burden driven by the need to understand the risk profile of clients, and clients’ clients.

QuantaVerse Third-Party Risk Management updates the values, volumes and velocity (V3) of accounts, predicts future expected V3 activity, highlights risk indicating variances, and confirms whether the account is being used for the stated purpose. This analysis is conducted on an ongoing or periodic basis, which is adjusted according to the firm’s management and reporting requirements.

The solution supports all transaction types: in/out bound, SWIFT messages, Fed/Chips, and all jurisdictional clearing houses e.g. CHAPS and will identify and alert risk indicating anomalies for both clients and pseudo-clients and enables users to drill down into the correspondent bank and contributing pseudo client activities that are creating these risky anomalies.

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QuantaVerse, LLC. | 435 Devon Park Dr. Bldg. 700 | Wayne, PA 19087

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