Implementing Anti-Money Laundering and Know Your Customer Managed Services Solutions using Robotic Process Automation

Implementing Anti-Money Laundering and Know
Your Customer Managed Services Solutions
using Robotic Process Automation
David DeLeon, AML Managed Services
Offering Lead, North America, Accenture
Philippe Guiral, Financial Crime Lead,
North America, Accenture
Melanie Hilley, Global Director of Legal
Services for AML and CTF, Accenture

Anti-Money Laundering (AML) and
Know Your Customer (KYC)
Managed Services Solutions
2Copyright © 2016 Accenture All rights reserved.

3
The financial services industry is experiencing increased scrutiny,
prompting institutions to rapidly evolve their AML and KYC
programs
Copyright © 2016 Accenture All rights reserved.
1. United States Government Accountability Office - Fines, Penalties, and Forfeitures for Violations of Financial Crimes and Sanctions
Requirements Report – March 2016
External Environment
• US Department of the Treasury Financial Crimes Enforcement Network (FinCEN)
Customer Due Diligence Rule -- requiring Beneficial Ownership
• Since 2009, financial institutions assessed about $12 billion in fines for violations
of the Bank Secrecy Act (BSA) and AML regulations and U.S. Sanctions
requirements1
Internal Environment
• Expansion of policies and standards – examples include (but not limited to):
o Capture and verify additional AML/KYC information on their clients
o Update AML/KYC information on a periodic basis
o Expand reviews to include relationships across business lines
• Significant increase in operational volumes
• Aging IT systems/infrastructure, with heavy reliance on manual processes
• Large and rising cost of AML/KYC compliance

4
Though organizations are focused on increasing the rigor and
scope of their AML/KYC functions, many are struggling to expand
their operations accordingly
Barriers to Improving AML and KYC
• Unsustainable Processes
o Simplification
o Reliance on manual Processes
o Understanding complexity of
process
• Skilled Talent Shortage
o Increased locations (near-
shore/offshore)
o Integration of global teams
• Insufficient Training
o Role-based training
o Incorporating Feedback and
lessons learned
• Inconsistent Quality
o Quality metrics
o Sampling calibration
o Continuous improvement

Addressing these issues calls for new approaches, including, in
many cases, adapting a managed services model for AML and KYC
functions
5
Access to
Skilled
Talent
Cost
Reduction
Increased
Scalability
Improved
Quality
 Scalable and cost
efficient operating
model with a variable
cost structure –
focused on continued
cost reduction
 Expedited completion
– leveraging follow-
the-sun capabilities
 Access to wider
talent pools and
lower cost locations
 Resource flex options
(ramp up/down),
alignment of skill/cost
to work complexity
 Embedded training
and development
capabilities
 Confidence through
early identification
and feedback
focused on common
issues
 Balanced approach
by calibrating
sampling based on
performance (e.g.,
reduced review for
higher performers)
 A culture of quality by
incorporating quality
into performance
management
 Standard, efficient
and repeatable
approach to
managing AML at
scale
 Improved
transparency into
operational
productivity, quality,
and capacity and
forecasting
 Building a global
AML/KYC capability

Organizations considering migration to this model should focus on
defining their scope and transformation journey
6
AML/KYC Managed Services Suitability
Operational VolumeLow High
Low
High
ProcessComplexity
Client (CDD)
Onboarding
Negative
News
Transaction Monitoring
Investigations
Periodic Review
/ Client Refresh
(CDD)
Politically
Exposed
Persons
1
2
3
5
7
Sanctions & OFAC
(Transactions)
5
Highly Desirable
Potentially Desirable
6
Least Desirable
Alert Review
Sanctions &
OFAC
(Client)
4
Source: Accenture, September 2016
Scope Selection
Factors
• Increased Suitability
o Lower
complexity
o Higher volume
o Lower AML risk
• Other
Considerations
o Customer
types
o Customer
interaction
points
CDD: Customer Due Diligence
OFAC: Office of Foreign Assets Control

7
Quickly and effectively address common challenges by taking
advantage of preferred industry practices and proven approaches
Prepare and Transition to a Managed Services model
• Process
o Standardization of processes and
procedures
o Process hand-offs
o Complexity/effort required
• Training
o Role based
o Conducting training and ongoing
support
• Location(s)
o Selection criteria
o Balancing resource skills with costs
• Mobilization
o Transition and ramp-up
o Peer grouping/coaching
• Quality
o Measuring progress
o Continuous improvement
o Accreditation

8
Audience polling question #1
Which factor do you think would have the largest impact on the
sustainability of your AML or KYC operations?
A. ___ Optimized/Automated Processes
B. ___ Greater Access to Talent
C. ___ More Effective Training
D. ___ Robust Quality Program

Robotic Process Automation
(RPA) for AML/KYC

10
What is robotic process automation (RPA)
Robotic process automation (RPA) is the application of technology to “mimic” the actions of
a human.
A bot logs into the same applications and does the same tasks as a person. But the bot
captures all details of the process and stores the details for potential auditing later.
Accenture Technology Vision 2015 Survey
78% believe that the new workforce will
consist of employees as well as
intelligent machines
Accenture Technology Vision 2015 Survey
84% of bank executives surveyed
agree that they will need to focus on
training their machines as much as
their people
30% lower total cost of ownership for
business operations by 2018 due to
use of smart machines
30%
Gartner Reveals Top Predictions for IT Organizations and Users for 2015 and
Beyond, October 7, 2014
Expect 35% of jobs will be automated
in the next 10-20 years
35%
Will a robot take your job?, BBC News, September 11, 2015
84%
78%

11
Robotics value proposition
Robotics can deliver payback on investment in about 3 - 6 months when implemented at
scale.
Increased productivity
with the potential to
operate 24/7 - less FTEs
needed to complete
repetitive tasks
Approximately 6 weeks
required for a cost-
effective implementation
Higher staff satisfaction by eliminating monotonous tasks
and allowing individuals to focus on higher value work
One “bot” equates on
average to 3 – 5 FTEs at
1/3 of the cost of an
offshore resource
Consistent quality
guaranteed as human
error is eliminated
New operational ability to dynamically manage
resource capacity and address peak volumes
ImpactsBenefits
Operational
Control
Productivity
Implementation
Satisfaction
Quality
Costs

12
Which processes are suitable for robotics?
Defining robotics opportunities starts with an assessment across existing business
processes, using a set of process, technology and risk feasibility criteria.
Rule based/no human
judgment
Digital trigger and
structured, digital data
High human error
likelihood
Highly manual
High volume
1 or more systems
Not frequent changes in
process steps/rules
Low exception volume
Automated Workforce

Criteria

RPA opportunities for AML/KYC functions
13Source: Accenture, September 2016
Robotics can be introduced to multiple AML/KYC processes. While further review of processes should
be conducted to determine full scope, initial actions can reduce cost, increase efficiency, and improve
quality for the processes listed below.
RPA Suitability for AML/KYC Functions
Operational VolumeLow High
Low
High
ProcessComplexity
Client Onboarding
(CDD)
Sanctions &
OFAC (Client)
Negativ
e News
Transaction
Monitoring
Investigations
Periodic
Review / Client
Refresh (CDD)
Politically
Exposed
Persons
1
2
5
4
6
9
Sanctions & OFAC
(Transactions)
7
Highly
Desirable
Potentially
Desirable
Alert Review8
Least Desirable
Client
Offboarding
(CDD)
3
• Compiling customer
information
• Confirming open accounts,
accounts on prohibited list,
etc.
• Validating existing client
information
• Documentation gathering
• Gathering customer
information
Refresh
• Low complexity refresh
• Medium complexity refresh
• High complexity refresh
Onboarding/CDD
• Client set up
• Onboarding
• Enhanced due diligence
Screening
• OFAC screening
• PEP screening
• Negative news screening
Offboarding/
Reporting
• Offboarding
• Ops metrics reporting
Opportunities for RPA
• Searching multiple internal
sources for open accounts
• Generating progress reports,
exception reports, and Quality
Assurance reports

14
Is your organization planning to implement RPA for Financial Crime
processes?
A. ___ No
B. ___ Not yet, but we are planning to
C. ___ Yes, we are currently doing a proof of concept
D. ___ Yes, we have already implemented RPA

Regulatory Considerations for
implementing Managed Services

16
Regulatory considerations for implementing managed services (1/3)
When engaging a managed services provider to assist your organization in meeting its KYC
requirements, the following questions can help you address key legal issues.
Regulatory
Approvals
Risk
Assessment
Accountability
and Discretion
• Have you identified the reasons for outsourcing?
• Does the managed services provider have the experience and technical,
managerial and operational capabilities to carry out the tasks?
• Is the managed services provider compatible with your corporate culture?
• Is the managed services provider reputable and financially sound?
• Does the outsourcing plan clearly demonstrate that ultimate responsibility
for compliance with KYC requirements remains with your organization?
• Is your managed services provider carrying out KYC steps according to
your directives as opposed to exercising its own discretion in dispositioning
cases?
• Do your regulators require you to obtain specific approval to outsource
certain functions to a managed services provider?
• Have you identified what your requirements are and worked with your
proposed managed services provider to address them, including risk
assessment and establishing an outsourcing plan?

17
Governance
and Supervision
Data
Considerations
Contingency
Planning
• Have you established clearly defined mechanisms to monitor and supervise
the performance of the managed services provider?
• Are the roles related to quality assurance appropriately divided between
your organization and the managed services provider?
• Does the outsourcing plan address confidentiality and protection of
customer data?
• Have you coordinated and documented business continuity and disaster
recovery plans with your managed services provider in the event of an
emergency?
• Does the outsourcing plan allow both your organization and your regulators
to access data at any time?
• Have you identified the availability of alternative providers or the possibility
of bringing the outsourced activity back in house in the event of an
emergency, and the costs, time and resources that would be involved?

18
AML Client
Compliance
Directives
Off-shoring
Contractual
Provisions
• Have you established client compliance directives for the managed
services provider that allow you to meet your AML regulatory requirements,
including adherence by the provider to applicable provisions of your AML
policies, agreement that their employees will take your AML training, with
instructions on how to identify and escalate a red flag, and record keeping
instructions?
• If offshoring is contemplated as part of the outsourcing plan, have you
addressed whether regulatory approval is needed from your home country
or the offshoring country?
• Do the offshoring country’s local laws allow your home country’s regulatory
bodies to access data?
• Have you established a written agreement between the parties that
documents all elements of the outsourcing plan?
• Have you addressed key legal items such as dispute resolution, governing
law, liability, indemnities, change management, background checks and
licensing of technology?

19
Has the increase in enforcement actions and significant fines imposed for
sanctions violations caused your organization to re-evaluate its KYC
processes?
• ___ Yes
• ___ No
• ___ Not yet, but there are plans to do so

20
Key takeaways
• Adapting a Managed Services approach for AML and KYC functions can quickly
and effectively reduce costs, increase quality and improve scalability.
• When considering migration to this model, itis critical to focus on defining the
scope and Transformation Journey of the transition.
• Robotic Process Automation can deliver return on investment in about 3 - 6
months when implemented at scale.
• Robotic Process Automation gives you an agile workforce available to deliver
capacity to scale at a moment's notice.
• Understanding the Regulatory considerations for outsourcing AML and KYC
functions to a managed services provider will help protect your organization from
regulatory scrutiny.
• Establishing an outsourcing plan and contractual provisions will provide clarity
between you and your managed services provider on the scope and parameter of
the services being outsourced.

For more on AML/KYC Managed Services, read our point of
view:
Anti-Money Laundering and Know Your Customer Programs: Sustainability
through Managed Services
www.accenture.com/us-en/insight-anti-money-laundering-know-your-customer-managed-
services

22
Implementing Anti-Money Laundering and Know Your Customer
Managed Services Solutions using Robotic Process Automation
Disclaimer:
This presentation is intended for general informational purposes only and does not take into account the
reader’s specific circumstances, and may not reflect the most current developments. Accenture
disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and
completeness of the information in this presentation and for any acts or omissions made based on such
information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible
for obtaining such advice from their own legal counsel or other licensed professionals.
About Accenture
Accenture is a leading global professional services company, providing a broad range of services and
solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience
and specialized skills across more than 40 industries and all business functions—underpinned by the
world’s largest delivery network—Accenture works at the intersection of business and technology to
help clients improve their performance and create sustainable value for their stakeholders. With more
than 375,000 people serving clients in more than 120 countries, Accenture drives innovation to improve
the way the world works and lives. Visit us at www.accenture.com
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