Software helps banks find dirty money

To help Canada’s financial institutions comply with the latest anti-money laundering regulations, Vancouver’s Datawest Solutions Inc. is adding new tracking software to its banking and payment technology.

FasTrac, created by another Vancouver-based company, Guthrie Phillips Group Inc. (GPG), automates a series of analysis and reporting requirements currently being developed by the new federal body set up to ferret out nefarious uses of Canada’s financial institutions. This body, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) will enforce anti-money laundering legislation – which started to come into effect in November 2001 – by collecting and investigating the banks’ tips abut suspicious actions, such as rapid or large money transfers.

Marina Ma, a Datawest associate for business development in Vancouver, said the FasTrac system automates the process of analyzing large volumes of transactions, and reports dubious ones to FINTRAC electronically.

“It really just extracts information form very specific files in our banking system using certain, very specific business parameters. For example, if the cash transaction is larger than a certain amount, or if there are multiple transfers of a smaller amount on the same day from one account to another to another, these patterns of activities will get detected.” Ma said.

At this point in time, Ma said that it wasn’t possible to detail FINTRAC’s requirements more specifically because the centre is still refining its parameters after a deluge of complaints from the chartered banks about the huge amount of work required to track transactions.

“Instead of looking at a way to automate this process, banks right now, especially the large banks who have a lot of bargaining power, are trying to tell FINTRAC that (the rules) are not reasonable. So FINTRAC is constantly reviewing and modifying these parameters to see if they can still catch the suspicious transactions without having to have a flood of reports going to them every day. It’s a very complicated situation, but the actual reporting technology is very straightforward,” Ma said.

Even though both the banks and FINTRAC are looking at mountains of work, Ma said given the public’s increasing concern about the movement of dirty money, the FI’s position favouring no reporting “is wishful thinking.”

“Right now there are loose regulations that say as long as the FI demonstrates that is has put sufficient effort to detecting fraudulent activities it is not liable. But because it’s very early in this game we don’t yet know what ‘sufficient effort’ actually means.”

As a result, when Datawest went looking for a FINTRAC reporting solution to add to its existing banking and payment software, Ma said that GPG’s was the only game in town – so far. However, once the regulatory issues are ironed out she expects a that a number of other similar software tools will start popping up.

“I think that these suspicious activities are going to be an ongoing concern with our (financial services) clients,” Ma said.

Datawest Solutions in Vancouver is at

FINTRAC is online at

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