South Africa’s Nedbank Uses FICO Technology to Stop Financial Crime
- None.
- None.
Insights
Nedbank's initiative to establish an Enterprise-wide Risk Intelligence Centre (RIC) using FICO technology is a significant step in enhancing financial crime risk management. By integrating various data points and employing advanced analytics, the RIC aims to provide a holistic view of potential risks, thereby improving detection and prevention of fraudulent activities. This proactive approach could potentially reduce operational losses from fraud, enhance regulatory compliance and maintain customer trust, which are critical factors in sustaining a financial institution's reputation and market value.
Furthermore, the ability to identify and disrupt crime syndicates during the testing phase demonstrates the effectiveness of the RIC and could serve as a benchmark for industry best practices. As financial crimes become more sophisticated, institutions that invest in such advanced risk management frameworks could gain a competitive advantage by minimizing losses and avoiding hefty regulatory fines. This could positively influence investor confidence and potentially impact Nedbank's stock performance in the long term.
The collaboration between Nedbank and FICO to create an integrated financial crime risk management framework underscores the importance of technological innovation in the banking sector. The use of AI, machine learning and optimization in the RIC not only streamlines the identification and management of financial crime risks but also highlights the evolving role of technology in compliance and risk management.
The flexible design capability of the RIC, which allows for the incorporation of new data without major changes to core system architecture, indicates a forward-thinking approach that aligns with the trend towards cloud-based solutions and scalable infrastructure. This technological agility is important as it enables financial institutions to adapt to emerging threats and regulatory changes swiftly. For stakeholders, this suggests a strategic investment in technology that can enhance operational efficiency and adaptability, potentially leading to cost savings and improved service delivery over time.
The recognition of Nedbank with a FICO Decisions Award for its application of AI, machine learning and optimization in financial crime risk management reflects positively on the bank's brand and could influence customer and investor perception. Awards of this nature often serve as indicators of a company's commitment to innovation and excellence, which can differentiate it in a competitive market.
Additionally, the establishment of the RIC places Nedbank in a leadership position within the African banking industry regarding financial crime prevention. As global scrutiny on financial crime intensifies, investors may view Nedbank's advanced risk management capabilities as a sign of resilience and strategic foresight. This could potentially attract investment and partnerships, thereby impacting the bank's growth trajectory and stock market performance.
Enterprise-wide Risk Intelligence Centre analyses data from across multiple systems to prevent fraud, money laundering and other financial crime; Nedbank wins a FICO Decisions Award for applying AI, Machine Learning and Optimization to financial crime risk management.
Highlights:
- Nedbank uses FICO technology to build a Risk Intelligence Centre to enable an integrated financial crime risk management framework
- The Risk Intelligence Centre identified a crime syndicate during the testing phase while initial production data was still being loaded
- Nedbank has won a 2024 FICO Decisions Award for AI, Machine Learning & Optimization
Global analytics software leader FICO today announced that Nedbank, one of South Africa’s largest banks, created an integrated financial crime risk management framework that uses FICO technology as part of the strategy to stop fraud, money laundering and other financial crime. Nedbank partnered with FICO to create the Risk Intelligence Centre (RIC), which consolidates relationships between entities and various financial crime risk factors into one comprehensive view. Nedbank has won a 2024 FICO® Decisions Award for applying AI, Machine Learning and optimization to financial crime risk management.
More information: https://www.fico.com/en/fico-platform
“Nedbank's strategic collaboration with FICO reflects a dedication to staying ahead of financial crime threats, ensuring the safety of customer assets and maintaining the highest standards of integrity,” said Riana Horn, Risk Intelligence Centre, Nedbank.
Nedbank created an integrated financial crime risk management framework that not only enhances the prevention of financial crimes but also addresses related reputational and credit risks more holistically. Nedbank partnered with FICO to create the RIC, which consolidates data from multiple systems and decisions from different committees, streamlining processes such as offboarding relationships or closing accounts due to financial crime, and making this critical information available across the entire bank.
Partnering with FICO for Enterprise Financial Crime Risk Management
“We needed the right technology that could consolidate all relationships with an entity and integrate known financial crime risk factors into a unified view,” Horn said. “Our collaboration with FICO is reshaping the landscape of our financial crime risk management, providing a comprehensive and interconnected approach to safeguard against multifaceted threats.”
FICO technology powers the RIC’s consolidated repository through decision services, an application studio, and the FICO® Identity Resolution Engine. The decision service harmonizes all known risk information to make informed decisions. The RIC was designed to enhance existing decision engines and detection systems, spanning client compliance, credit affordability, suspicious transaction monitoring, transactional fraud detection, employment and supplier vetting, among others.
“A critical requirement was the establishment of robust identity resolution capabilities that can ingest data from internal and external sources,” Horn added. “That is the pivotal role played by the FICO Identity Resolution Engine. It enables the creation of a singular entity view, the clustering of links between individuals and organizations, and the identification of relationships with Nedbank. It will empower us to explore further degrees of separation between potential criminal groups and other accounts, staff, suppliers, etc. — these data separations allow financial crime to thrive. The sophisticated capabilities of FICO technology position us to proactively address and mitigate these risks.
“The RIC’s key advantage lies in its flexible design capability, allowing us to incorporate new data without necessitating a redesign of our core system architecture. This allows us to ingest data dispersed across legacy and target architecture without any major changes being needed,” said Horn. “The collaborative synergy between FICO Platform and our evolving cloud architecture will enable a seamless migration of the decision service to FICO Platform in the next phase, preserving data integrity and reinforcing our commitment to proactive financial crime prevention.”
“Through the Risk Intelligence Centre, Nedbank positions itself at the forefront of innovation in financial crime risk management, reinforcing its commitment to safeguarding its clients' interests in an ever-evolving financial landscape,” said Nikhil Behl, chief marketing officer at FICO. “We are proud to be part of Nedbank’s innovation in tackling financial crime and protecting its customers and its reputation.”
“Nedbank's approach to financial crime risk management truly stands out, showcasing a deep understanding of the interconnected nature of risks across diverse relationships,” said Andrew Birmingham, editor, Mi3 and one of the FICO Decisions Awards judges. “The establishment of robust identity resolution capabilities enabled a view of the clustering of links between individuals and organizations critical to finding nefarious activity. We were also particularly impressed by the innovative thinking that went into breaking down the siloed structures typical of banking operations.”
About the FICO Decisions Awards
The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based on measurable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2024 judges are:
- Andrew Birmingham, editor, Mi3
- Eric Kavanagh, CEO Bloor Group and host, InsideAnalysis
- Elizabeth Lumley, deputy editor, The Banker
- Paul Mah, senior editor, CDO Trends
- Laura Martins, editor, IT Forum
- Paul Robinson, VP credit management at Canadian Tire Bank (Previous Winner)
- Shiv Sehgal, EVP audience analytics at RSG Media (Previous Winner)
- Nick Vitchev, director at Chartis
The winners of the FICO Decisions Awards will be spotlighted at FICO® World 2024, April 15 – April 18, 2024 in
About Nedbank Group
Nedbank Group is a bank holding company listed on the JSE, with a market capitalisation of R109 billion at 31 December 2022. Nedbank is one of Africa’s largest banking groups, with operations in
Learn more at https://www.nedbankgroup.co.za.
About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by
Learn more at https://www.fico.com.
FICO is a registered trademark of Fair Isaac Corporation in the
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321135394/en/
FICO
Wendy Harrison/Parm Heer/Matthew Enderby
ficoteam@harrisonsadler.com
0208 977 9132
Source: FICO
FAQ
What technology did Nedbank use to build a Risk Intelligence Centre for financial crime risk management?
What award did Nedbank win for applying AI, Machine Learning, and Optimization to financial crime risk management?
How does the Risk Intelligence Centre help Nedbank in preventing financial crimes?
What is the role of the FICO Identity Resolution Engine in Nedbank's financial crime risk management framework?
What is the key advantage of the Risk Intelligence Centre's design capability?
