Apparently software Standard Chartered installed to spot suspicious transactions was just so darned complicated that they couldn’t install it correctly. That’s why so many transactions linked to Iran somehow snuck through. The bank has already been fined $667 million for this, and now may be fined again. Drat that pesky software!
The bank installed the problematic transaction-monitoring software system late last decade. It was supposed to flag suspect transactions, and then bank compliance staff could see whether there were signs of possible criminal activity that needed to be reported to authorities, said the other source.
However, the so-called “detection scenarios” that tell the system what activity to flag for human review were not properly calibrated, the source said.
Tragically, the improperly calibrated software ran for years, producing bogus results, without anyone thinking they should double-check the results. Really?
Programmers have a phrase for this – Garbage In Garbage Out. And how very convenient this was for the bank, which is now promising to “scour records” for possible money laundering. I have upmost faith and confidence in them, how about you?