DTCC goes on the offensive against money laundering

The Depository Trust & Clearing Corporation, Wall Street’s post-trade processing engine, has gone live with Norkom’s software as part of its programme against financial crime and money laundering. The software monitors trades, automatically issuing alerts to the DTCC’s investigations and compliance team when it identifies suspicious transactions that fall outside of normal parameters.

DTCC, which in 2005 settled trades totalling $1.4 quadrillion, will use Norkom technology to move towards monitoring over 50 million US domestic, fixed income and equity trades every day, and build a complete profile of every customer in its business based on historical trading patterns.

Sal Matera, DTCC’s vice president of information services, said: “We will use Norkom’s advanced profiling capability to determine usual trading behaviour for each customer. Because of the sheer volume of trades passing through our system, time is of the essence. The Norkom solution is scalable and able to support a large number of transactions on a national and international basis and, coupled with its strong case management capabilities, can support the rigorous risk-based approach our regulators increasingly demand.”

As part of its AML strategy, DTCC will allocate risk profiles to new and existing customers based on a number of factors, including an assessment of their AML processes and controls. “The risk profile allocated to each customer will determine the level of scrutiny applied by the technology when monitoring and investigating their transactions,” Matera said.

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