Nationwide Case Study

Nationwide Implements AML Software ERASE

Nationwide Building Society (Swindon, UK) has implemented ERASE Enterprise Risk Monitoring Software in order to deter money laundering. Nationwide is the largest building society in the world, with 11 million members. Entrusted with the personal finances of 1 in 4 United Kingdom households, Nationwide is the 4th largest mortgage lender, and 3rd largest savings provider in the UK, with 14,000 employees and over 680 branches across the UK. In November 2002, Nationwide announced it took an estimated 13.3% of the total increase in UK retail savings in the previous 6 months, with member savings balances rising to £58.6 billion.

In its search for an anti-money laundering system, a key requirement for Nationwide was a solution that was capable, and proven in the marketplace – already in full production at customer installations. From a technology perspective they determined that business rules or triggers alone were not sufficient enough for the requirements. Profiling of customers was critical to find patterns of activity that would otherwise be missed by rule systems.

With its large volume of customers, monitoring up to 3 million transactions daily, it was essential that a system delivered high-quality, targeted, accurate alerts so that its compliance team was not inundated by a lengthy list of false posivities. Moreover, Nationwide required prioritization in order to aid in investigation and a case management system with comprehensive management information and workflow.

Today ERASE monitors 11 million customers at Nationwide. Russell Johnston, Head of Legal Compliance (Consumer Affairs) and Deputy Group Money Laundering Reporting Officer for Nationwide, said, “Nationwide has always put great emphasis on deterring and detecting money laundering activity. NetEconomy’s ERASE software enables us to identify suspicious financial transactions for all our Banking & Savings products. ERASE covers our branch network, as well as ‘non-face-to-face’ transactions, via our Internet bank and postal savings channels.”

Using an integrated risk database, ERASE is able to profile and establish a unique financial pattern for each Nationwide customer. In addition to this profiling, Nationwide and NetEconomy have created various business rules that will work with the personal profiling capability to identify suspicious activity that warrants further investigation. ERASE reduces the number of erroneous reports and increases the probability of identifying true money laundering activity. Since ERASE uses the Microsoft toolkit, it is a good fit for Nationwide’s technical server-based architecture, enabling interfaces to be built with relative ease.

Within Nationwide there is a specialist anti-money laundering team, who reviews all suspicious transactions that are generated from ERASE and from staff notifications. This team of seven people decide whether to report the case to the police and they also deal with United Nations sanctions issues. ERASE arms Nationwide’s compliance staff with a full range of AML capabilities including rich investigative tools and next-generation case management and reporting. This built-in functionality streamlines internal AML processes and optimizes workflow for a fully operational production system.

Nationwide’s next phase is to implement the ERASE system to cover products beyond Banking & Savings, including loans, mortgages, credit cards, unit trusts and Nationwide’s Treasury Department.