Dutch financial conglomerate ING has implemented an automated solution for anti-money laundering and fraud detection that is monitoring approximately 10 million customers in three of its retail banks in the Netherlands.

The solution, ERASE Compliance Manager from NetEconomy, was implemented in PostBank, RegioBank and ING Bank in the Netherlands, said Tom Wever, IT manager of ING Retail DWH. NetEconomy is one of the winners of the Windows in Financial Services Innovator Awards, to be announced in the Fall issue of the magazine. In PostBank, RegioBank and ING Bank in the Netherlands alone ERASE is monitoring eight million transactions a day with peaks to 16 million transactions a day.

The solution was chosen in part because its flexible architecture would allow it to be used in a variety of units that fall under the ING umbrella, ranging from large retail banks, such as the first three in which the system was implemented, to smaller offices in overseas locations, Wever said. ING has since expanded use of ERASE to offices in nine countries in Europe, the former Eastern Europe, the Caribbean and the US, according to Wever and NetEconomy CEO Sebastian Kuntz, though Wever could not discuss specifics of those engagements as they were outside his area.

For the three retail banks in the Netherlands, one implementation monitors all three institutions, allowing one department to oversee several locations.

The system was a bit of a departure for ING in the Netherlands from previous technology, in that the retail banks had never run a system of that large a scale on Windows before selecting ERASE.

“NetEconomy told us Windows would be robust enough for the performance we needed if we had the correct hardware. They had to prove it to us by benchmark tests, which they did, and it has met our requirements,” Wever said.

The system monitors customers, accounts and transactions to ensure compliance with anti-money laundering, Know Your Customer and Basel II requirements as well as compliance with EU directives.

The system has several ways of monitoring for suspicious activity. It can do client ID matching and look for generally suspicious or out-of-the-ordinary activity; it also compares clients to a peer group to see if activity is atypical in relation to others in its group; and it also screens by banking product for unusual activity for a particular product type.

“If a student starts dealing like a well-paid business man, or a garage starts sending out bills that are not normal for a garage, it might be worth further investigation,” said Kuntz in explaining the peer group screening.

Meanwhile, a view of banking products can spot deviations from the norm as well.

“If a savings account is used several times a day, an alert may be generated as that is not how a savings account is typically used,” Kuntz explained.

In terms of basic screening, there are certain transactions, such as those over a certain size threshold that may trigger automatic alerts or rules.

When suspicious activity is uncovered, an alert is generated and it can be automatically assigned to a bank compliance officer or anti-money laundering investigator. The investigator may decide there is reasonable reason for the unusual activity, but if the activity is questionable, a case can be created within the system to connect documents, information requests and other materials associated with an investigation.

Workflow rules can also be implemented, such as requiring that a minimum of two people view or sign off on certain suspicious activity (the four-eye principle).

At PostBank, RegioBank and ING Bank in the Netherlands, the system also complies with an internal ING Financial Economic Crime (FEC) policy. The FEC is basically a system through which ING has brought together implementation of several external policies into a more coordinated framework.

For the three ING banks in the Netherlands, the new system replaces a process in which much investigation was done on paper, and it wasn’t as easy to view customer profiles.

“Quality-wise, it’s much better. We have more in-depth knowledge of what the customer does and it’s easier to raise questions with the account manager,” Wever said.

In terms of the amount of time spent in investigations, Wever said the overall time consumed by investigations has not changed, but it’s better allocated.