Feature - Fighting money-laundering, with the grid
When it comes to money laundering, crime really does pay. An estimated 1 trillion US dollars is laundered annually worldwide by criminals moving dirty money around in an attempt to cover up the origins of their cash.
AMONG is helping banks to cooperate in order to improve their Anti-Money Laundering (AML) mechanisms. Currently, banks track suspicious behavior with AML systems set up within their own individual institution, with communication between banks initiated only in the case of an anomaly. But this approach can only detect simple cases of fraud.
“Money laundering cannot be dealt with when you look only within one organization,” says Kostas Tserpes from NTUA (National Technical University of Athens), a partner in the project. “By default, the person doing money laundering is not going to use just one bank, he’s going to use many.”
AMONG provides a way for banks to share AML information between institutions. By having access to this shared source of money laundering information, banks can more easily trace the movement of illicit money through apparently unrelated accounts and channels.
As banks all have different AML systems, AMONG implemented grid technology to collaborate between the different platforms and allow for inter-organizational sharing. But interoperability was not their only challenge.
In SLAs we trust
“We needed to have some way to encourage trust between banks,” says Tserpes. For this, the project team used Service Level Agreements (SLAs) incorporated into the industrial grid middleware GRIA.
“The SLAs helped us to monitor agreements between banks and limit the interbank queries performed,” says Fotis Aisopos from NTUA. “If unlimited queries were allowed to take place, this would be catastrophic, as banks could use the platform for malicious purposes and perform more and more queries for customer data. (Known as phishing.) By limiting the interbank queries through the SLA terms, we managed to avoid this kind of attack and establish a kind of trust between collaborating banks.”
GRIA provides two ways for banks to limit the number of queries. They can either be blocked after a set number or, once the limit is exceeded, the cost of querying can increase, discouraging malicious behavior.
The GRIA middleware also helps to solve another of the project’s challenges: security. Certificates ensure that only the authorized user has access to AMONG accounts, and they also allow for the level of security to be adapted according to the bank’s requirements.
The AMONG project formally ended in April, 2009, but the team is working to launch the platform commercially in Greece in 2010. “Right now, the problem is that current systems do not have the potential ability to capture the crime in real time, and their success rates are really, really low,” says Giorgos Panousopoulos from EXODUS, an expert in AML technologies. Reports suggest that, for every 100 cases flagged up by current AML systems, only 5- to 7- cases are confirmed as suspicious. If AMONG is widely adopted in the next few years, it could greatly improve these statistics.
—Manisha Lalloo, GridTalk