Why Tableau for AML (Anti Money Laundering)?

Even the best algorithm is useless if you cannot deploy it quickly in your bank's IT infrastructure. That's why we chose Tableau.

 

However, using Tableau empowers you to deploy Benford's Law in your IT infrastructure quickly and easily.

Tableau is one of the most popular data visualization tools used by data analysts and business intelligence professionals today. We have been implementing data analytics in Tableau for many years. However, not every data problem can be solved in Tableau (sometimes you need Palantir). If it’s possible to implement your solution in Tableau, users often can reduce costs and increase speed.

In our experience, customer requirements are dynamic: dashboards (your reporting interface) need to be changed, parameter settings require a deeper drill down, managers what to receive a big picture dashboard weekly, AML specialists want an additional visualization showing the correlation between invoice duplicates and money laundering … all those requirements can be done in Tableau – virtually on the fly.

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BenfordAnalytics for Tableau

We've spent a considerable amount of time making BenfordAnalytics work in Tableau. BenfordAnalytics works natively in your Tableau. In other words, the algorithm does not require any additional program or interface outside your company.

 

The advantages for you are:

 

- Near real-time monitoring for trade-based money laundering.

- No additional software or software licenses are required.

- Fast implementation.

- No black-box algorithm.

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Figure 3: BenfordAnalytics for Tableau.

Summary: BenfordAnalytics is an additional tool to detect TBML for financial service companies. In other words, it should not be your only tool (e.g., it doesn’t screen customers). However, BenfordAnalytics is very powerful in identifying TBML schemes.

 

 

 

The following dataset (figure X) with the fictive company name Starlight Software, LLC has not been flagged as suspicious. The observed distribution of each digit (e.g., 47) is pretty close to Benford’s expected distribution. No bar is highlighted in red. Thus, based on a 95% confidence level, we do not suspect any money laundering activity.

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Figure 4: Based on Benford's Law, a non-suspicious dataset.

Let's turn our attention now to a dataset that has been flagged as suspicious by Benford's Law. The invoice amounts are most likely randomized as the distribution is reasonably normal. In other words, most observed distributions are within +1/-1 standard deviations (dotted orange lines).

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Figure 5: A highly suspicious dataset that has been flagged based on Benford's Law.

As we will see in the research results, randomized or close to randomized invoices are the easiest to spot with BenfordAnalytics. Based on my research, we can detect randomized invoices with 100% accuracy.

 

The following money launderer strategy will be much harder to detect …

 

 

 

 

Benford's Law has flagged the following dataset. However, this one is harder to detect than with randomized invoices (figure X). Why? The observed distribution follows Benford's expected distribution most of the time, while there are some anomalies with invoices starting with 51 and 55 (bars in dark red).

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Figure 6: A suspicious dataset that has been flagged based on Benford's Law.

What does harder to catch mean? In general, we want to detect money laundering activities as fast as possible. However, if a money launderer creates invoices that follow Benford's expected distribution most of the time, the algorithm requires more samples until it can flag the dataset with confidence.

 

A visualization of the money flows can be helpful in your investigation. In the case of our flagged company, Padlock Solutions, Inc., BenfordAnalytics shows all money flows by Padlock Solutions, Inc. plus enormous money flows (by total amount) color-coded in red.

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Figure 7: A suspicious dataset that has been flagged based on Benford's Law.

Conclusion: BenfordAnalytics empowers you to detect trade-based money laundering directly in Tableau. While it’s probably not your only software to use for detecting TBML, BenfordAnalytics can detect money laundering attempts with up to 100% accuracy.