In a recent post, I suggested that workflow design be dictated, to some extent, by volumes. If you have lots of states or work folders that are lightly used, you might be better off with rethinking how you segment your data and design your workflow.
Well, the same is true for false positive reduction (FPR) configuration. Making a system change to save a single match that may or may not recur is not a good use of operations or IT resources; it may take less time to clear an individual item than it does to figure out the change you want to make, get it approved, test the change thoroughly and implement it.
In general, rules-based processing (as opposed to whitelisting) should be modified for recurring, higher-volume matches. Where that lower bound is for a particular firm, within limits, depends on where they want to spend their money – on staff or consultants to modify the system or on operational staff to clear the matches.
- My first client was an investment bank. They had 1100 FPR rules, some of which were unclear to me as to intent. So, we scanned 6 months’ of traffic to determine what got ignored due to those rules Guess what? 500 of the rules were unused. Apparently, operational staff had written a rule each time they got a match.
- An investment bank was performing watchlist screening for a check disbursement product. None of the matches were high-volume, but they were clock-like in their regularity – each biweekly or monthly. And they had a lot of them. For them, anything that was regular was fair game, because that was the nature of the business.
- When I was at UBS, we processed German war reparations payments once a quarter. On that single day, 4 times a year, our matches doubled because of how the bank formatted SWIFT field 72. If you averaged those matches over the entire quarter, they fell below the threshold used to change the application configuration. However, since the impact on those 4 dates was so significant, we addressed those matches with system changes.
- A recent client had a fair amount of high-frequency matches, but also a decent number of lower-frequency ones. While the high-frequency matches constituted maybe 50-60% of the total, the client wanted to derive as much value from our time, and minimize their internal operations costs, so we included the lower-frequency items and reduced matches by over 90%.
The “how” of finding out what changes to make is another post for another day – it’s boring Excel and/or Access stuff.
For those not as old as I am, or from outside the US, let me explain the title (beyond its relevance to the subject matter). On October 4, 1986, longtime CBS anchorman Dan Rather was mugged by two men who kept asking him “Kenneth, what is the frequency?”. In 1994, the band R.E.M. included the song “What’s the frequency, Kenneth?”, referring to that incident, on their Monster album. So, now you know…