Neil Kelly
Managing Director, Industry Consulting in Financial Services
NTT Data
- This article was originally published on May 23, 2025, and is re-published as part of AML Intelligence’s ‘Most Read of 2025’ series
The pace of innovation driving new threats, the growing complexity of FinCrime and new global regulatory frameworks are creating an increasingly challenging environment for Financial Institutions (FIs).
Further, continuous disruption in technology (AI, Crypto etc.) has enabled organised criminal networks to scale and accelerate the sophistication of their attacks, with AI technology such as bot nets empowering bad actors to massively scale Fin Crime activities, as they continually look for the weakest links in the system.
Against this backdrop, FIs endeavouring to successfully prepare, prevent, protect and respond to the challenges, have been compelled to rapidly deploy and adopt point solutions, in many instances building additional localised and siloed departmental processes. Along the way, these FIs have typically adjusted their operating model to fit new systems, processes and compliance requirements, whilst trying to factor customer experience, cost implications and risk appetite.
As their operating models evolve, FIs must evaluate if they’re set up to address these multi-faceted challenges, giving primary consideration to their existing model, examples such as:
· Centralised Operating Model:
o All processes and systems are managed centrally.
o Complexity arises from the need for robust coordination and communication across departments.
· Distributed Operating Model:
o Each department manages its own processes and systems.
o Complexity arises from the lack of standardisation and potential duplication of efforts.
· Hybrid Operating Model:
o Combines elements of both centralised and decentralised models.
o Complexity arises from balancing central control with departmental autonomy.
These examples highlight how different operating models can create complexities in managing financial crime challenges. FIs must carefully evaluate their approach to ensure they are effectively addressing these issues, potentially considering re-setting the foundations of their Fin Crime operating model.
In addressing this foundational need with FIs, NTT DATA has developed a 5-lens approach to assess and enhance the financial crime operating model. This approach ensures that all aspects of the operating model are thoroughly evaluated and optimised for efficiency, effectiveness, and compliance.
The five lenses are:
1. Centralised / Outsourced / Distributed / Hybrid Model:
o Focussing on the structure of the operating model, specifically how processes are centralised, outsourced, or distributed. It examines the foundational components of the operating model, including the people executing the end-to-end processes. It also
reviews and assesses the feasibility of centralising or outsourcing all financial crime operational processes for various entities
2. Policies and Processes:
o This lens provides clear guidance and linkage between people and technology. It is the foundation of operational procedures within the first line of defence. It aims to identify and standardise and automate processes to enhance efficiency and reduce manual errors. It also bring into consideration implementing rules-based dynamic due diligence via perpetual KYC models to continuously assess customer risk.
3. Technology / Data / MI:
o Technology is the key enabler to efficiently execute the desired operating and capability models. This lens focuses on the tools, systems, data analytics, and automation used to support the financial crime operating model. In this area it is noteworthy that leading FIs are implementing advanced analytics AI-based solutions for real-time monitoring and detection of financial crime.
4. Organisation and Governance Structure:
o This lens ensures that financial crime processes function in a structured manner and decisions are controlled and transparent. It examines the roles, responsibilities, oversight, and reporting mechanisms within the organisation. FIs should also consider establishing a dedicated financial crime center of excellence (CoE) to centralise expertise and resources, whilst also looking to expand the 1LOD CoE function to include internal fraud, credit fraud, and anti-bribery and corruption (ABC) and create a financial crime academy to increase specialised knowledge.
5. Control Framework:
o The control framework provides assurance of efficiency, adherence to processes, and external regulation. It is also utilised in ongoing process improvement. FIs may also wish to establish an independent quality assurance (QA) function within the 1LOD and enhance the risk assessment methodology to include three risk tiers.
If you found this blog insightful and are interested in exploring the complexities of financial crime operating models further, we’d love to continue the conversation. Reach out to learn more and discover how you can strengthen your approach to financial crime risk management
Neil Kelly is Managing Director, International Consulting at NTT DATA who were lead sponsor at EAFC25.
Please find the NTT Data website here for more information: NTT Data
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