Automated Client Onboarding For Banks - Oracle

Automated Client Onboarding for Banks Oracle SOA & BPM Seminar, August 31st, 2011 Excellence in Compliance and Document Management

Excellence in Compliance and Document Management for 24 years and into the future Founded in Switzerland in 1987 Profitable and independent for 24 years Customers in more than 45 countries Headquarter in Givisiez / Switzerland – Offices: – Aug. 2011 Page 2 Vienna London Athens Singapore Key Partners – Actimize – Assentis Ltd. – Oracle – Tonbeller AG Excellence in Compliance and Document Management

IMTF’s value added is based on its financial services industry focus and experience in both Product Development and Project Implementation Focussed offering in ECM and Compliance: 9 “deep & narrow” vs. “broad & shallow” 9 Integrated in your (banking) processes In-house developed “State-of the-Art” products for more than 23 years: 9 Hyperdoc / Hypersuite / ZVx / etc. Integrator of complementary “Best-in-Class” solutions: 9 DocFamily / SironXX / Oracle UCM / etc. Over 600 successful projects with proven expertise in 9 complex technologies & products 9 IT integration and automation Aug. 2011 Page 3 Excellence in Compliance and Document Management

Today IMTF is the leading partner for Content Management and Compliance applications for more than 200 Banks (80 in CH) Aug. 2011 Page 4 Excellence in Compliance and Document Management

“Client Onboarding for Banks” is an application to evaluate and manage the customer’s risk at the account opening stage: Customer due diligence: comply with regulations KYC (“Know-your-Customer”): relevant and sufficient information about the potential new client Integrated Checks: against sanction lists, PEP databases, etc. Process & control: rules, actions, audit, documentation Aug. 2011 Page 5 Excellence in Compliance and Document Management

This application is part of IMTF’s SironAML-Suite - a comprehensive and true end-to-end Anti Money Laundering Solution Aug. 2011 Page 6 Excellence in Compliance and Document Management

The application is offering a rich functionality for identification and verification of a client and its risk: Professional tool for developing and layouting dynamic “Know Your Customer” customer acceptance questionnaires Customer information capturing including situation-depending variants for the questionnaire and real time Risk Rating Interfaces to 3rd party applications such as CRM, Core Banking System, etc. Watchlists, Blacklists and Sanctions List scan and PEP screening Configurable workflow Business rules for risk rating and actions to be taken Deadline expiration management (e.g. ID expiration) Aug. 2011 Page 7 Excellence in Compliance and Document Management

The (ongoing) Customer Risk Rating is calculated on factual information such as customer identity information, behavior related and transactional elements: External Data Internal Data Analytics Risk Rating Risk Scoring Customer Identity Relationships Identity discrepancies f Customer history f Ownership structures f Geographic locations f Documentation status f Beneficiaries f OFAC screening f Account behaviour f Signature rights f PEP screening f Channels used f Link analysis f Occupation / business f Previous SARs filed f Logical entities Page 8 High Medium Low f Aug. 2011 Customer Behaviour Risk based reviews & surveillance Excellence in Compliance and Document Management

The main function of SironKYC is a flexible rule & policy authoring tool with individually definable risk levels and actions: Every Year Every 2nd Year Unacceptable Every 5th Year ? Flexible KYC Questionnaires and Business rules/actions High Medium Continuous Investigation Customer approved Low Risk Rating (can be defined individual) Account Opening Blacklist Customer Customer not approved 3rd Party Application PEP Check Aug. 2011 Page 9 Sanctions Watch Lists Bad Press Ultimate Beneficial Owner Customer Identification Program (CIP) Excellence in Compliance and Document Management

The basis of this automated process is structured information (from the KYC questionnaire) about the customer: Aug. 2011 Page 10 Excellence in Compliance and Document Management

SironKYC includes an “easy build” tool for the developing and layouting of such KYC questionnaires Aug. 2011 Page 11 Excellence in Compliance and Document Management

During the onboarding process the application automatically performs checks against chosen watch/sanction lists, PEP databases, All applicable embargo regulations and legal requirements in order to identify “PEPs” (Category of high risk customers) are covered PEP risk segment is critical because several national regulations require its identification among your customers Standard interfaces to commercial PEP database providers (including World- Check, Dow Jones/Factiva, WorldCompliance, ) are available SironKYC PEP module provides this functionality by screening your customers’ database through “your” watch-list Aug. 2011 Page 12 Excellence in Compliance and Document Management

The integration of SironKYC into your environement is comprehensive, both from a logical perspective as well as Management Commitment Processes Initiatives Risk Assessment Security & Technology Usage Database/List Providers PEP ? Know your Customer (KYC) Customer Acceptance WL/ Sanction lists Stock Information Simplified CDD Enhanced CDD Statistics / Lessons learned Research AML/CTF Anti-Fraud Market Abuse WLM ( ) Case Management & Reporting Aug. 2011 Policies Page 13 Risk & Compliance Cockpit Excellence in Compliance and Document Management Training & Awareness program Business & organization

. from a technical integration into an existing environment (via Web Services): 3rd Party Application Siron KYC PEP List Sanctions & WL Blacklists ( ) A Scenario A: SironKYC looks after the entire customer acceptance process C Scenario C: KYC questionnaire is called via URL B Scenario B: SironKYC looks after the screening process (as web service) (Existing) Customer Acceptance System Aug. 2011 Page 14 Excellence in Compliance and Document Management

As a result, SironKYC ensures that new customers do not pose an unacceptable risk to your bank and provides the base for ongoing Risk Rating Monitor customer behavior Check stated behavior with actual Account Opening Increase Risk (L - N) continuous control monitoring See [5] 2 1 3 5 4 6 8 7 Customer approved/ not approved Determine initial risk (A - H) Account Opening (Siron KYC) A. B. C. D. E. F. G. H. Aug. 2011 Dynamic KYC questionnaire I. Check against watch lists J. Collect documents Enter expiration date ID K. documentation Use of 3rd party applications Ultimate beneficial owner Parent tree Escalation; EDD, 4-eyes principle Page 15 11 10 9 Re-Calculation of the risk (I - K) Expiration date identification documents (O - Q) Change in customer behavior compared to stated Ongoing customer due diligence (Siron AML) Deviation actual transaction behaviors L. with stated Change of non-financial elements, M. country, etc Calculate new risk level, if increased N. generate alert Create alert for Compliance/Account manager Assign to employee Perform EDD, 4-eyes principle O. P. Q. Create alert for Compliance/Account manager Assign to employee Collect new documents, add new expiration date Excellence in Compliance and Document Management

performs checks against chosen watch/sanction lists, PEP databases, All applicable embargo regulations and legal requirements in order to identify "PEPs" (Category of high risk customers) are covered PEP risk segment is critical because several national regulations require its identification among your customers