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Claire Rees1 May 24

Benefits for Lenders of Automated Transaction Monitoring and Customer Screening

Benefits for Lenders of Automated Transaction Monitoring and Customer Screening

If you’re a lender, your business is likely to be mostly regular, predicted, “normal” transactions. So one of the questions I’m often asked is, “As a lender, why do I need an automated transaction monitoring system?”

Of course, the risk profile for secured and unsecured lenders is very different to savings or current accounts. Indeed the JMLSG suggests there are “generally low risks associated with mortgage business and related protection policies” but low risk is very different to no risk.

Lenders still need the ability to detect unusual activity or patterns of transactions which may indicate financial crime is taking place. And whilst the volume of transactions is lower than, say, a bank account, for most lenders it’s impossible to track changing patterns of payments without some form of automation.

Lenders are subject to the same AML rules and regulations as many other financial services, so identifying and reporting on suspicious activity is a must. 

Particular patterns of activity which may indicate suspicious activity and warrant further investigation include: 

  • overpayments above the contractual amount, especially where these may incur a penalty;
  • large payments made by customers with known payment difficulties;
  • payments from unknown third parties; or
  • repeated additional borrowing and overpayments.

Each firm’s products may offer different features which introduce different risks, so it’s vital that each firm considers how they may be susceptible to financial crime, and tailor their monitoring accordingly.

Additionally, lenders are subject to sanctions legislation so screening customers against relevant sanctions lists is a must. 

Whilst some firms carry this out at onboarding, at set triggers or on an ad-hoc basis, lenders should be carrying out ongoing monitoring of their customers against sanctions lists, as well as remaining alert to other changes in their risk profiles. This may include checking against PEP lists or adverse media.  

How can an automated Transaction Monitoring and Customer Screening solution like Jade ThirdEye help?

As well as offering a library of rules to tackle a range of known financial crime threats, Jade ThirdEye works with each of our clients to understand their business and offers bespoke rules to fit their risk. Our solution also offers the ability to segregate different areas of the business, allowing firms to tailor their rules to the different risks in different business units.

We offer ongoing support and regular health checks of your rules, as well as full training for users on how to use our rules engine, ensuring that our customers have the knowledge and flexibility to quickly adapt their rules, or develop, test and launch new rules to meet emerging threats.

Coupled with our automated screening solution, our clients can tailor their rules according to the customer risk too.

Jade ThirdEye also comes with a Case Management solution, meaning that investigations can be managed within a defined workflow. Notes and evidence can be attached, and cases can be linked together where necessary. 

Finally, everything in our system is captured in a robust audit trail, giving peace of mind that your financial crime monitoring is all under control.

If you’d like to talk to the Jade ThirdEye Team about how we can help you manage your financial crime risk please use the form below to get in touch.

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Claire Rees

Claire Rees is a Financial Crime Regulatory Specialist in the UK for Jade ThirdEye. Claire has over 21 year's experience working in Risk Management roles in financial services, 17 years of which were spent specialising in Financial Crime Prevention in a number of senior roles including most recently as Head of Fraud and AML with a mortgage lender and service provider. Claire has participated in a number of regulatory and industry Financial Crime panels including a Government AML advisory panel and the CIFAS Insider Threat Advisory Board which explored ever-changing insider fraud threats.