Client Showcase: Leading Global Cryptocurrency Exchange

TLDR:

Client Profile: Top Digital Currency Exchange in the World 

Notable Quote: “You saved me like 1000 hours”  

Type: Private 

Industry: Cryptocurrency 

Operates: Globally  

There are two major use cases: 1. Tuning, and 2. Monitoring List Updates. 

Tuning 

Most well-tuned sanctions screening systems will generate between 0.6% and 1% of matches for all queries. Meaning if you have say a 10,000 queries on a day, the operations team will receive between 60 and 100 matches. Each match to a sanctions list must be properly analyzed. In average the analysts spend about 4 to 5 minutes to evaluate each match and 99% of those are discarded as false positives. This is regular industry practice for the best operations teams.  

Our client generates thousands of sanctions alerts daily given their daily trading volume and the millions of active account holders. They employ a group of analysts overseas so they can deal with the alert volume. Any minimum improvement in the match percentage literally turns into hundreds of saving hours for his team, and dollar savings for the company. 

The sanctions screening system they are using isn’t easy to tune. In order for them to tune the system they have to contact their provider and ask them to adjust it, then test it again, tune it again, this cycle repeats itself until they reach the level of adjustment that performs as their baseline and program dictates. This process can take weeks if not months. Once an adjustment is reached on the matching algorithm, they must prove that it performs equal or better than the existing one.  

Yanez profiles the system automatically and presents all possible adjustment results. The only thing the client must do is to choose the best performing point. “Yanez saved me like 1000 hours of work” that is what our client said after choosing an adjustment that would reduce the number of alerts by almost 0.2%. Our client is now in the process of measuring against real traffic. Once that is done they will be reducing the total number of alerts by thousands a week, and reducing the operational cost by $$$ monthly. The expected ROI return on the expense of our technology is at least 10 to 1. 

Monitoring List Updates 

Every sanctions operations must verify that their sanctions screening program is running the latest sanctions lists. This means that every time there is a list update by a regulatory bodies, the sanctions operations team has to manually test that such updates are applied to their operations. This implies: 1) there is an analyst whose job is to monitor list updates. 2) Manually take a sample of list updates. 3) Connect to the user interface of their sanctions screening technology. 4) Verify that sample of entries is covered by their system. 5) Document that such process was executed. 

OFAC (Office of Foreign Assets Controls) the sanctions regulatory body in the United States, may update its lists several times a week. And so it does the United Nations, the European Union, and the OFSI in the United Kingdom. 

So if you have a global operations your sanctions operations team spends several hours a week doing this job. In the best case scenario the sanctions screening provider updates its lists on time, most commercial vendors do a reasonable job at this. But it is not uncommon that  once in a while the vendors miss an update, or they apply an update late. In which case the analyst must follow up with whomever manages the sanctions screening technology to verify that it was indeed a glitch and not something systemic that needs attention. While the regulators may accept that screening vendors take hours to update their lists, they care that the sanctions screening program has a process to check the lists periodically and that there is a process in place to deal with the events in which they don’t. 

Yanez does the monitoring automatically. The system monitors all the lists for all the jurisdictions that are relevant and alerts if the screening system falls behind. The system keeps track of its checking so it is all documented for internal and external audits. In the case of an alert it keeps track when the problem was resolved. The only manual work analysts may need to perform is the communication with the screening provider on those instances where the provider isn’t updating their lists on time.  

Catching a systemic issue with the provider by monitoring the list update can save millions of dollars in potential fines and industry reputation.