Data and Risk Management:A Match Made in FinTechAdrian Black: CEO, Contego Fraud Solutions Ltd

27 March 2014

Risk&

Data

A RiskTypology

Market Risk

Credit Risk

Liquidity Risk

Operational Risk

Legal & Regulator

y Risk

Business Risk

Strategic Risk

Reputation Risk

So what do we mean by “risk”?

• The best companies manage risk by taking a holistic view of all risks faced by the enterprise

• Once risk factors are understood, businesses run, and regularly re-run, risk assessments of each risk factor

• Risk assessments used to evolve systematic procedures to reduce likelihood and impact of key risk factors

A RiskTypolo

gy

Market Risk

Credit Risk

Liquidity Risk

Operational Risk• Fraud

• Inefficiency

Legal & Regulator

y Risk• Complian

ce failure

Business Risk

Strategic Risk

Reputation Risk

So what do we mean by “risk”?

• The best companies manage risk by taking a holistic view of all risks faced by the enterprise

• Once risk factors are understood, businesses run, and regularly re-run, risk assessments of each risk factor

• Risk assessments used to evolve systematic procedures to reduce likelihood and impact of key risk factors

Some key FinTech risks

Fraud• The annual cost of fraud to the UK economy is huge• Fraud losses can damage, cripple and kill companies• Too many think fraud only happens to the guy next door

Operational Inefficiency• Must be efficient to compete, survive & maximise returns• Back-office processes often lag behind revenue growth and create

performance drag

Compliance Failure• Severe penalties for compliance failure in regulated businesses• Reputation damage can be severe

Opportunity:aggregate and leverage data

to reduce these risks

£52bn

So what data should you leverage?

Real-time lookup & risk

scoring

Your InternalData

Fraud Markers& Watchlists

Best of breedcommercial data

People & CompaniesLaw

EnforcementIntelligence

Open Source dataYou’d be amazed!

Fraud Forums, Trade Associations

& PeersShared intelligence

YourInterna

l Systems

Why? – To reduce risks• Improve compliance• Reduce fraud• Improve efficiency• Lower IT, data &

other costs• Protect reputation

At Contego we aggregate everything we can

The Contego solution

Goal: tap into the universe of data to bring efficiency and certainty to clients seeking to

reduce risk

• Aggregate best-of-breed data on people, companies & other entities

• Provide real time due diligence & risk scoring• Enhanced KYC, Identity Verification & ID document checks• Case management module & encrypted cloud storage

• Clients select any combination of:• SaaS Console for management & manual checks• API for full integration into client systems• Customised & branded onboarding forms

Contego Case Study: Regus

Requirements• Compliance: with Money Laundering Regulations & London Local Authorities Act• Fraud: detection of high risk & fraudulent new clients• Efficiency: improve efficiency of client onboarding & compliance processes• Intelligence sharing: screen against trade association & law enforcement intelligence

Solution• Customised application form for all clients (limited company, sole trader, etc)• Automated risk scoring, identity verification & compliance checks• Management console to process “refer” results & perform deeper due diligence• Secure upload, scanning & storage of ID documents as part of “compliance pack”

Aggregated Data used to reduceOperational, Regulatory & Reputation Risk

A final word: Intelligence Sharing

• We know that sharing intelligence reduces collective risk

• Law Enforcement Agencies will share intelligence to reduce harm• Preventing fraud, money laundering & terrorist financing counts

• Data Protection Act is not a barrier if data used & handled correctly• DPA is wrongly used as an excuse not to share intelligence

• Using a trusted partner can help• To analyse & transform data into actionable intelligence• To ensure information security to a certifiable level• Encryption & other security measures are important

• Reciprocal intelligence sharing benefits all participants• It’s not a zero-sum gameSo don’t hoard intelligence:Share it for the collective

good!

Thank you – any questions?

adrian@contego.comAdrian Black

Contego: Manual Console