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Improving Banking Compliance Checks


Banks have controls in place to check their derivative trades. Their control teams oversee the completeness of each trade by reading every line of the trade contracts, processes, forms, regulations and policies for any untoward issues. Compliance checking is such a massive effort that banks need special experts with both banking and legal knowledge to perform these kinds of routine tasks. However, manual processing can lead to reaction latency, customer complaints and even result in customer loss.

Considering the huge volume of trade, control teams are only capable of sampling 20 percent of a month’s trade documents. With most of the data left unprocessed, banks are at high risk of regulatory breaches and even criminal charges if left unattended. In order to avoid risky situations, banks invest heavily in their legal professional departments and spend billions of dollars on manual regulatory compliance.

Technological Innovations

We have developed BlueSCAN, a cognitive tool to address the above challenge. BlueSCAN takes all historical trade documents, classifies them according to their compliance levels against specific regulations, learns fine-grained regulatory domain knowledge, builds a single version of the truth from big data, identifies the changing requirements and bridges the gap between traditional searches and NLP to deep cognitive technical innovations. By digesting all trade documents into a concentrated data store, BlueSCAN analyzes these documents collectively, comparatively, and cognitively.

BlueSCAN reads all trade documents and understands the deep semantic associations among them and their relationships to associated regulations and policies. BlueSCAN checks every trade against all evaluating criteria and sends only dubious or incomplete trades to professionals to double-check and identify specific compliance risks for individually filtered cases.

The legal professionals need only go through pre-identified risk items with the help of clearly highlighted semantic difference details. They can then see how each clause is worded and how it semantically matches or differs from standard clauses. In the end, it’s up to the legal professionals to determine whether to accept or counter any problematic clauses they may find.

With the help of BlueSCAN, the same control team can now process 100 percent of all trade documents. BlueSCAN’s smart technology relieves the team of tedious tasks and accelerates compliance checking more than ten times.

Technological Advantages of BlueSCAN

BlueSCAN demonstrates cognitive capabilities where computers read, understand and analyze documents with domain knowledge. This capability can be extended to industries like education, law, government, and healthcare to improve professionals’ productivity and transform industries significantly.