The International Bank Account Number (IBAN) was intended to help make cross-border euro payments more efficient. Interestingly, the establishment of the IBAN also has had the unintended consequence of limiting payment options for corporates. How is it that the establishment of a standard meant to streamline payment processing would also limit options for customers making payments? The dilemma of the IBAN revolves around the “cross-border” aspect.

Here’s what’s happened...In order to meet SEPA mandates, many corporates utilizing enterprise resource planning (ERP) systems to maintain profiles on their vendors have replaced the legacy account numbers with IBANs. But, in many ERP systems, there’s only room for one account number per vendor. So, with the legacy account number out and the IBAN in, the information needed to create payments that don't cross borders is no longer in the system. What’s a corporate to do?

The answer lies within the IBAN itself. The legacy account number is in fact concatenated within the last part of the IBAN, but deriving it is no simple task. There are numerous variations, often by country or even by bank, that make the seemingly straightforward task of IBAN decryption anything but.

Whether this is a short- or long-term issue remains to be seen. Some believe that national payment systems will begin utilizing the IBAN for their local payments, which would eliminate the dilemma altogether. This is already true in Italy where, as of January 1, 2008, the ABI (Italian Banking Association) has made the IBAN the standard of account identification for use in cross-border as well as domestic payments. If this trend continues, the need for a legacy account number will be moot. Such a move would go a long way toward allowing organizations beyond the banks to realize the efficiencies promised by SEPA.

Trade and Technology: The New AML Battleground
The escalation in trade and technology-based money laundering poses serious risks to institutions. Sophisticated, trade-based money laundering schemes are difficult to detect because the perpetrators greatly distance themselves from the money laundering process. Technology has advanced our ability to monitor and identify suspicious patterns of activity. However, in the hands of money launderers, it facilitates innovative cyber schemes making your institution vulnerable to criminal and terrorist exploitation.

This seminar will provide you with the intelligence and training you need to guard against becoming the target of money launderers or government investigators.
www.moneylaundering.com/hottopic

Much has been written, mostly negative, about the Federal Bureau of Investigation’s Terrorist Screening Database and how it has delayed many innocent travelers at U.S. airports — here’s an example. Many opponents of the list cite that the list has grown too large making it non-specific to the point of uselessness.

This problem is not unlike the challenges banks face with interdiction screening. Financial institutions globally have struggled with regulatory screening requirements since the early 90s and they understand that the bulk of the people flagged by their screening systems will likely be false positives. In response to such “needle in the haystack” searches, many vendors have developed systems that can drastically reduce the number of false positives generated by screening allowing financial institutions to deal with a much smaller set of much more viable matches.

Taking this view, the airlines’ problems do not lie within the terrorist database itself but rather with how they execute their screening processes. By employing simple false positive reduction methods and tools they could significantly reduce the impact on innocent travelers and instead focus on those matches that represent true risk. So, James Robinsons of the world, have heart!