De-Siloing Compliance: Unified Case Management in Transaction Monitoring

FinCrime compliance is challenging because institutions with siloed systems often need help detecting and managing suspicious activities during transaction monitoring.

According to a recent report from WBR Insights, data silos are one of the biggest barriers that financial institutions come across with 54% of the financial institutions reporting that data silos affect their innovation.

Unified case management helps financial institutions consolidate transaction monitoring by eliminating silos. This approach provides clearer insights, improved efficiency, and a stronger foundation for compliance.

The Cost of Siloed Compliance

Fraud and AML investigations are often handled on separate platforms due to siloed systems, leading to major challenges that undermine risk management, reduce operational efficiency, and affect compliance outcomes.

Let’s understand how traditional fragmented systems are damaging the budgets and reputations of financial institutions around the world:

1. Operational Inefficiencies

Siloed systems lead to unnecessary duplication of effort. Compliance teams often perform the same tasks multiple times, such as manually cross-referencing customer data or investigating related cases across different departments. 

A study by Thomson Reuters found that 45% of compliance professionals do not track the overall cost of compliance within their organizations. The report also found that cost pressures and balancing compliance with competitiveness are key challenges, but many firms lack effective monitoring systems.

This lack of coordination wastes time and resources, slowing the response times for high-risk situations. Moreover, disjointed workflows between fraud and AML teams impede communication making it challenging to collaborate effectively and share important findings.

2. Missed Risk Detection Opportunities

Fragmented systems prevent financial institutions from gaining a full view of customer risk. When fraud alerts and AML data are not integrated, key connections can be missed, leaving blind spots in risk detection. 

The EMEIA 2021 report revealed that 38% of financial institutions flagged inadequate data standardization as a major issue, while 32% were challenged with fragmented data caused by disconnected systems and software.

For instance, a suspicious transaction flagged in one system may go unexamined if not correlated with contextual data from another system. The lack of a comprehensive view increases the risk of undetected criminal activity which can cause significant financial and reputational harm.

3. Regulatory and Compliance Risks

Compliance functions operating in silos struggle to maintain consistency, which can lead to incomplete or inaccurate filings of Suspicious Activity Reports (SARs). These inefficiencies raise the risk of regulatory penalties and audits as regulators expect transparent and streamlined workflows. 

The first half of 2024 saw a 31% surge in the value of fines issued compared to the same period in 2023, totaling over $263 million for non-compliance with AML regulations. This includes KYC, sanctions, and transaction monitoring violations.

The lack of a unified system also makes it difficult to adapt quickly to changes in compliance requirements, further exposing institutions to risks.

4. Escalating Costs

Managing multiple systems is expensive because of high licensing fees and ongoing maintenance costs. A recent study highlights the global financial burden of compliance, revealing that financial institutions incur a total cost of $206.1 billion. 

The study notes that this expense is equivalent to over 12% of global research and development spending and costs around $3.33 monthly for every working-age individual worldwide.

Redundant workflows increase operational costs, as compliance teams spend more time than necessary on tasks that could be automated or streamlined in an integrated system.

Unified Case Management: A Strategic Solution

Unified case management tackles the challenges financial institutions face from siloed systems by consolidating compliance workflows into a single, unified platform. 

Here’s how this transformation equips institutions with the necessary tools to manage financial crime risks efficiently:

Centralized Alerts and Data Access

Unified case management systems consolidate alerts from fraud and AML tools into one platform, giving investigators instant access to all relevant data. This removes the need to switch between multiple systems and ensures that important information is always accounted for.

Case managers allow you to unify 10+ different systems into one place and investigate all types of FinCrime including AML, fraud, and sanctions for efficient decision-making. With all alerts in one place, duplicate entries are flagged and resolved efficiently, accelerating case resolution.

Collaborative Workflows Across Teams

One of the most significant advantages of unified systems is the ability to encourage collaboration between fraud and AML teams. Investigators can seamlessly transfer cases between departments, ensuring that all findings are shared and acted upon in a coordinated manner. 

AI-powered case managers allow compliance teams to work with tools for streamlining work assignment configuration and precise performance tracking. Seamless team handovers and parallel workflow actions are fully supported, with every activity documented in a detailed audit log for transparency and accountability.

Holistic Customer Risk Profiles

Unified systems aggregate data from multiple sources to create comprehensive customer profiles. These profiles include information such as transaction histories, KYC data, and external media screening results. 

These systems enhance transaction monitoring with near real-time insights and overviews, allowing you to address important risks and behavioral anomalies. Financial institutions can secure their operations by quickly turning these observations into actions and creating cases in the case managers directly from Profiles.

Streamlined Investigative Processes

Automation is a key element of unified case management. Tasks such as SAR generation, transactional analyses, and adverse media screening can be automated, freeing investigators to focus on higher-value work. This improves efficiency while ensuring compliance processes remain consistent and accurate.

Implementing unified case management delivers measurable improvements across key operational and financial metrics, making it a strategic imperative for financial institutions.

Reduced Costs

Unified systems significantly lower operational expenses by consolidating software platforms and eliminating inefficiencies. Institutions save on licensing fees and IT support costs while reducing the need for manual intervention in routine compliance tasks. 

A case management system addresses the primary cost drivers in AML compliance by automating labor-intensive processes using AI and machine learning. This significantly reduces manual workloads and operational costs.

Improved Risk Detection

Case Manager identifies potentially fraudulent cases through real-time dashboards and automated workflows. Suspicious payments are automatically flagged and held for verification before processing allowing compliance teams to review and manage flagged transactions directly within the platform.

This proactive approach to risk management strengthens an institution’s defenses against criminal activity.

Time Savings

Analysts spend 80% of their day on data gathering and manual tasks. With Case Managers and AI Copilots, investigation times can be reduced from hours to minutes. Automating repetitive tasks and optimizing workflows allows these tools to help investigators focus on uncovering valuable insights and making informed decisions.

Automated workflows streamline reporting and compliance processes, ensuring timely submissions and reducing backlogs.

Enhanced Regulatory Compliance

Unified case management streamlines the challenges of regulatory compliance. With centralized audit logs and transparent workflows, institutions can easily demonstrate compliance. Every step of the investigative process, from data collection to final analysis, is thoroughly documented and reported to meet regulatory requirements and support internal audits. The Regulatory Reporting system streamlines the SAR filing process, shortening the time financial institutions take to submit SAR reports.

The system's ability to adapt to new regulations ensures ongoing compliance and minimizes the risk of penalties.

Proven Success: Real-World Benefits of Unified Systems

Unified case management has delivered transformational results for institutions that have implemented it. A global bank adopting a unified platform reduced its investigation times from 6 hours to 1 minute per case. This increased efficiency allowed the bank to handle more cases without adding additional staff.

Another financial institution reported a 60% reduction in compliance costs after consolidating its fraud and AML systems into a single platform. Automation tools eliminated redundancies, further streamlining operations and lowering overhead costs. 

An integrated system also enabled one institution to uncover previously unnoticed money laundering patterns, strengthening its ability to mitigate risks. Regulators are emphasizing integrated compliance systems for their capacity to enhance transparency and accountability. Unified case management supports these goals by offering a centralized platform for financial crime investigations.

Transitioning to unified case management requires a structured approach. Institutions should begin by aggregating data from existing systems, ensuring that all relevant information is integrated into a centralized platform. Selecting scalable and interoperable technology is essential to facilitate seamless integration without disrupting current workflows.

Automation tools should be implemented to streamline repetitive tasks, such as SAR generation and case triage. Finally, comprehensive training programs are necessary to help compliance teams adapt to the new system and maximize its potential. By following these steps, institutions can build a robust compliance framework that enhances efficiency and reduces risks.

How Lucinity Supports Unified Case Management

Lucinity’s unified case management solutions empower financial institutions to overcome the challenges of siloed compliance functions and embrace a streamlined, effective approach to transaction monitoring. 

Lucinity integrates advanced AI technology with a user-focused design to offer significant advantages to compliance teams.

1. Centralized Case Management: At the core of Lucinity’s platform is its advanced Case Manager, which consolidates all compliance workflows into a single interface. This tool integrates disparate systems, providing a unified source of truth for fraud and AML investigations. 

The Lucinity Case Manager unifies signals from alerts, transactions, and external data sources that enable quick decision-making.

2. AI-Driven Insights with Luci Copilot: Lucinity’s AI-powered assistant, Luci Copilot, enhances investigative efficiency by transforming complex financial crime data into actionable insights. 

Luci automates important tasks like case summarization, SAR generation, and adverse media screening, saving investigators valuable time. This functionality reduces investigation times by up to 75%, enabling teams to focus on high-priority cases.

3. Seamless Integration with Luci Copilot Plugin: Lucinity’s system-agnostic Luci design ensures effortless integration into existing compliance infrastructures. 

Whether your institution relies on legacy systems or modern cloud platforms, Lucinity’s tools can be deployed with minimal disruption. This flexibility eliminates the need for costly overhauls and accelerates implementation, providing an immediate ROI boost to productivity by up to 90%.

4. Holistic Scenario-Based Monitoring: Lucinity’s unified case management system combines scenario-based transaction monitoring with AI-based behavioral monitoring to streamline financial crime detection.

Its scenario-based monitoring adjusts to shifting risks, enabling institutions to stay proactive against emerging challenges. This unified approach enhances collaboration among compliance teams, accelerates response times, and reduces operational costs.

5. Transparent and Secure Compliance: Transparency and security are at the heart of Lucinity’s platform. With detailed audit logs and explainable AI outputs, Lucinity ensures full accountability and compliance with regulatory standards. 

Built on Microsoft Azure’s secure infrastructure, the platform protects sensitive data while maintaining robust privacy protocols.

Final Thoughts

Unified case management represents a transformative approach to transaction monitoring and compliance. This unified approach enhances collaboration among compliance teams, accelerates response times, and reduces operational costs. 

Here are key takeaways from this blog for a brief look at the insights:

• Unified case management reduces investigation times by up to 90%, streamlining workflows and decision-making.
• Scenario-based monitoring enhances detection accuracy, supporting the 38% of institutions dealing with fragmented data.
• Consolidating systems can cut compliance costs by 60%, eliminating redundancies and optimizing workflows.
• Unified systems help mitigate compliance risks, as demonstrated by a 31% surge in fines in 2024, totaling over $263 million.

To learn more about how Lucinity’s unified solutions can support your compliance efforts, visit Lucinity.

FAQs

1. What is unified case management in transaction monitoring?
It integrates fraud and AML investigations into a single platform, enabling better collaboration and efficiency.

2. How does unified case management improve compliance?
It consolidates data, automates workflows, and provides comprehensive audit trails to meet regulatory requirements.

3. What technologies enable unified compliance systems?
AI, machine learning, and system-agnostic integrations are key to enhancing data analysis and improving workflows.

4. Why is breaking down silos important in compliance?
It eliminates redundancies, enhances risk detection, and provides a comprehensive view of customer activity.