Nasdaq launches automated tool for investigating money laundering

Nasdaq has launched an automated solution for investigating anti-money laundering (AML) for retail and commercial banks and other financial institutions. 

The Automated Investigations Management space is a historically underserviced area of financial crime operations that presents a significant gap in the investigation management process for banks. 

Many techniques are used to launder money, causing banks to cast a wide net to catch perpetrators. The wide scope of surveillance means AML Transaction Monitoring (AMLTM) systems could potentially trigger as many as 200,000 to 300,000 alerts a month in extreme cases. 

In response, many banks have tightened the parameters within their AMLTM systems or added additional scoring mechanisms, thereby reducing alerts. However, when banks tune their models too tightly, they run the risk of missing criminal activity and exposing themselves to regulatory sanction. Even those that have tightened their parameters can experience 20,000 to 25,000 alerts in a month.

The Nasdaq Automated Investigator ingests alert data from any transaction monitoring system, collates all of the necessary data required for analysis, analyses the data. It aims to replicate complex human decision making in seconds to provide a clear, auditable justification for all alerts regardless of volume. 

The service was designed, built and offered in partnership with UK-based Caspian.

“The financial industry is making a structural shift to more intelligent technologies and real-time adaptive analytics based on much larger, more diverse data pools to detect and investigate financial crime,” said Nasdaq’s Valerie Bannert-Thurner. “Through the years of expertise we have gained as an industry leader in trade surveillance, we are both moving beyond our alerting capabilities to investigation, and expanding our solutions to help eradicate illegal money transactions.”

“Our solution improves the manually intensive anti-financial crime process by fully automating all stages of the existing manual alert investigation process to deliver accurate, consistent decision-making,” added Darren Innes, Head of AML Technology.