Features - Enterprise Data Insights:

WELLS FARGO BANK SOFTWARE TO COMBAT MONEY LAUNDERING

The financial institution's current systems are based on fairly static rules. The company wanted a new system that was more adaptable to real-world transactions as well as one that would learn and improve as it went along, said Bob Chlebowski, the company's executive vice president of distribution strategies. "That is really the heart of it, moving from rules to a more dynamic environment," he said.

After the Sept. 11 terrorist attacks, President Bush signed the USA Patriot Act, which put into effect more stringent requirements for banks to monitor and report potential money-laundering activities. The act has spurred a number of financial services companies to upgrade their detection systems.

Earlier this year, banking and financial services giant UBS announced that it would use Searchspace's anti-money-laundering system. Charles Schwab and Citigroup have announced that they will be using a detection system offered by Searchspace rival Mantas. Searchspace's system is able to examine nearly every customer transaction, including those through its brokerage, consumer lending, private banking and international businesses, Chlebowski said. The system will not comb through the transactions in real time; instead, it will examine them in daily batches.

Searchspace's software compares a transaction conducted within one account with other transactions in that account as well as with transactions in similar accounts to look for anomalies, said Konrad Feldman, chief executive officer of Searchspace. The software learns as it goes, becoming more familiar with "normal" transactions and better able to spot suspicious activity, he said. The system will alert human operators at Wells Fargo of any suspicious transactions. By law, Wells Fargo will report those to the federal government.

Wells Fargo will run Searchspace's Intelligent Enterprise framework and AntiMoney Laundering Sentinel software on top of a single server from IBM, a partner of Searchspace. The software will run on top of AIX, IBM's flavor of Unix, on an IBM pSeries eServer. The Searchspace software will work in tandem with IBM's DB2 database. Searchspace will tie into Wells Fargo's existing and legacy computer systems using XML, Feldman said.