Expert answer:outline on final project
Expert answer:Attached is module 4 which is due tomorrow. Please disregard “team” as it is an individual project. I also attached portfolio which is the case study for the capstone and portfolio requirement that is needed for the outline in module 4. I only need module 4 homework which is phase one of my portfolio project. Thank you.
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portfolio_requirement.doc
portfolio.pdf
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This final project is based on the following Harvard Business case study:
Khachatryan, D. (2014). Amarcord Incorporated: Combating money-laundering using data analytics.
HBS No. BAB260. Boston, MA: Harvard Business Publishing. Retrieved from
https://cb.hbsp.harvard.edu/cbmp/pl/72033374/72033389/bf9124d95cd4c02a304479b93349fb4b
Assume your client accepted your urgent business proposal to design a data-driven approach to
effectively accomplish the goal of fraud detection in financial institutions. Data analytics for fraud
detection in financial institutions is the strategic management vision of Amarcord Incorporated, Chief
Compliance Officer. You will work based on the average or aggregate monthly incoming wire
transfer of $500,000 for a swimwear chain considered highly unusual by business analysts for that
business chain. In other words, it is impossible for a business chain of that size to earn such a high
monthly revenue.
This project is not a presentation as the case indicates. It will be submitted as a written report.
After reading and analyzing the case, you are required as part of the final project to address the
following:
•
•
•
•
•
•
Identify and address the business problem and explain the need for a data analytic solution.
Explain the data analytic approach to tackle the business problem.
Explain the nature and structure of the received data (i.e., the average monthly revenue of
$500,000) and how data inconsistencies can be resolved.
Elaborate on all the undertaken modeling and forecasting strategies.
Emphasize and summarize key findings as well as observations, and recommend further
steps that your client should undertake in the data-analytic realm that could potentially lead
to another engagement with your team.
Deliver your project report so that it provides clear and thorough answers that both technical
and non-technical audiences will understand.
Your written paper should meet the following requirements:
1. Be eight to 10 pages in length, plus exhibits or illustrations
2. Be divided into the following sections:
• Identification of business problem and evaluation of the need for a data-analytic solution.
• Explanation of the data-analytic approach to tackle the business problem.
• Explanation of the nature and structure of the received data (i.e., the average monthly
revenue of $500,000), and how data inconsistencies can be resolved. Do you agree or
disagree with the business analysts that the aggregate monthly revenue of swimwear is
three times higher than the industry average? Justify your position.
• Evaluation of all the undertaken modeling and forecasting strategies such as brainstorming
solution and so forth.
• Summary of key findings as well as observations, and recommendations for further steps
that your client should undertake in the data-analytic realm, which could potentially lead to
another engagement with your team.
• Generate a project report that provides clear and thorough answers that both technical and
non-technical audiences will understand.
3. Support your project with six to seven peer-reviewed articles/professional journals. Your
online library contains excellent resources for this project.
4. Be formatted according to the CSU-Global Guide to Writing and APA Requirements.
5. Include a title page, introduction, conclusion, and references page.
Entrepreneurial Leader Collection
BAB260
OCTOBER 2014
Amarcord Incorporated: Combating Moneylaundering Using Data Analytics
The Amarcord Incorporated Case
According to the Department of Justice, money laundering is the process by which
criminals knowingly conceal or disguise the proceeds of their crimes or convert those proceeds
into goods and services. Some illegal sources of income are drug trafficking, illegal gambling,
arms trafficking, and bribery. The Bank Secrecy Act (also known as the Anti-money Laundering
Law or AML) passed by U.S. Congress in 1970, together with the USA PATRIOT Act of 2001,
tightened the regulation of banks regarding money laundering. In particular, those laws require
banks to have effective fraud detection platforms in place to identify and flag potential money
launderers. When the latter are identified, banks are required to file a Suspicious Activity Report
(SAR) to the Financial Crimes Enforcement Network (FINCEN) for each transaction signifying a
potential money laundering behavior. One of the many responsibilities of the Office of the
Controller of the Currency (OCC), an independent bureau within the U.S. Department of
Treasury, is to provide oversight ensuring that the AML regulations are closely followed by
banks and financial institutions. The OCC regularly examines banks to ensure that they are well
prepared to combat money laundering. Amid growing concerns regarding the preparedness of a
number of banks to effectively combat money-laundering, the OCC is planning a thorough
examination of Amarcord Incorporated, a bank in the southern U.S.
Amarcord is a $40 billion asset regional bank holding company headquartered in New
Orleans, Louisiana. The Bank was founded in 1951 under the name Amarcord Trust Company on
the outskirts of Baton Rouge, Louisiana, before moving to its current headquarters. At its
inception, the Bank mainly provided commercial banking services and served the greater Baton
Rouge area. Within a decade, the Bank extended its operations and started serving small
business in the state of Louisiana. Currently, Amarcord provides consumer banking services,
mortgage banking services, equipment leasing, wealth and investment management services,
This case was prepared by Davit Khachatryan, Assistant Professor of Statistics and Analytics, at Babson College, based on published
sources. It was developed as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative
situation. The funding for this case was provided by Babson College’s Teaching Innovation Fund. It is not intended to serve as an
endorsement, source of primary data or illustration of effective or ineffective management.
Copyright © 2012 Babson College and licensed for publication to Harvard Business Publishing. All rights reserved. No part of
this publication can be reproduced, stored or transmitted in any form or by any means without prior written permission of
Babson College.
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BAB260
OCTOBER 2014
Amarcord Incorporated
trust services, and brokerage services, as well as other financial products and services. Through
well-established relationships with automotive companies, Amarcord also offers commercial
banking services to auto dealerships. The primary market for the Bank is Amarcord’s four-state
retail banking franchise, including Louisiana, Texas, Arkansas, and Mississippi. The services are
distributed through conventional channels consisting of over 250 branches located in various
business centers as well as through alternative distribution channels such as internet, mobile,
telephone, and more than 900 ATMs.
The AML Chief Compliance Officer (CCO) Leonard Peterson of Amarcord is well aware of
recent money laundering scandals involving banks such as BNP Paribas, HSBC, and Barclays.
Mr. Peterson is aware that Amarcord does not transact with the entities listed in the
Financial Action Task Force (FATF) blacklist, namely the terrorist organizations and countries
that are not cooperative in the global fight against money laundering and terrorist financing. In
addition, he is confident in the Bank’s proprietary software that meticulously monitors
transactions coming from Cash Intensive Businesses (CIBs) such as casinos and restaurants as
well as from Money Service Businesses (MSBs) such as currency exchanges and money
transmitters. Nonetheless, Mr. Peterson is worried that certain money laundering activities may
go unnoticed if Amarcord’s suspicious activity monitoring and detection platform does not
undergo material enhancements in the area of predictive analytics. Judging from the media
news release at the end of the last fiscal quarter, competing banks in the region are undertaking
significant investments in the area of data analytics and predictive modeling. Failing to adopt a
fully operational data analytics platform would imply falling behind in the competitive
landscape of regional banking in addition to risking the Bank’s reputation and compliance.
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BAB260
OCTOBER 2014
Amarcord Incorporated
Mr. Peterson has been particularly keen on tracking Bank’s customers’ spending habits over
time and building profiles for each and every customer. According to Mr. Peterson, the majority
of bank customers have predictable transacting habits and it is the sole responsibility of the
Bank to uncover those transacting patterns by diligently and accurately mining the data that is
being automatically collected and fed into Amarcord’s repositories round the clock. In fact,
money launderers often use bank accounts of legitimate-looking businesses to circulate the
corrupted money through the financial system, thus suddenly injecting huge amounts of cash
into those accounts. Consequently, for instance, knowing the typical transacting behavior of a
business account would be crucial, since if all of a sudden that account is being used for money
laundering through a deposit of a suspicious check with a large amount, the typical transacting
behavior of that account will serve as a benchmark to measure the latest transaction against. Of
course, flagging customers, according to Mr. Peterson, would not necessarily imply true moneylaundering behavior but would certainly raise the Bank’s awareness regarding monitoring the
“flagged” customers’ transaction activity more closely in the future.
For a long time Mr. Peterson’s vision of such a detection platform was politely welcomed by
the upper management at the Bank, the only obstacle being that the Bank did not have the
appropriate staff to commit to such a major undertaking. But towards the end of the last fiscal
quarter, Mr. Peterson – together with the Chief Information Officer (CIO), Mr. Ricardo Martinez
– finally managed to convince upper management that the scope and urgency of the proposed
solution necessitated the bank to contract out the work.
Assignment Details
You and your team submitted a proposal for a pilot-study with Amarcord and have recently
been notified that you are being awarded the contract. Your team’s task on this urgent
assignment is to design and propose a data-driven approach that will effectively accomplish Mr.
Peterson’s vision. To arrive at the procedure, you are provided data, culled from Amarcord’s
repositories, on monthly aggregate incoming wire transfer amounts into the bank account of one
of its customers, a U.S. chain of stores selling swimwear. Based on business knowledge related
to swimwear retail, the management of Amarcord finds it extremely unlikely that a swimwear
chain of that size will have an aggregate monthly incoming wire transfer amount exceeding
$500,000.
Your client company is looking for two things: a presentation/pitch to management
explaining the data-driven approach that you will come up with for flagging bank accounts
based on suspicious incoming wire transfers, and a written deliverable report detailing your
approach. The deadlines for both the presentation and the report will be announced by the
instructor at the project kick-off. During the final presentation, the management of your client
company expects that your engagement team will:
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BAB260
OCTOBER 2014
Amarcord Incorporated
Present the business problem and emphasize the necessity for a data analytic
solution;
Clearly explain your team’s data-analytic approach to tackle the business problem
that your client is facing;
Explain the nature and structure of the received data, and how data inconsistencies
and issues were resolved by your team;
Apply the data-analytic approach that your team designed using the data that were
received and “cleaned” by your team. The team also needs to elaborate on all the
undertaken modeling and forecasting approaches by clearly comparing and
contrasting them;
Emphasize and summarize the key findings as well as observations, and recommend
further steps that your client should undertake in the data-analytics realm, which
could potentially lead to another engagement with your consulting team;
Fit the presentation within the allocated timeframe;
Deliver the presentation in a way that is well-organized and accessible to both
technical and non-technical audiences; and
Provide clear and thorough answers to all the questions asked by the audience.
Note that each presenter will have anywhere from 3 to 5 minutes for his/her pitch except for
the first presenter, who will both open up the presentation for 3-5 minutes and conclude it for
another 3-5 minutes.
The management expects that in the written deliverable report your engagement team will:
Discuss the business problem and the data-analytic approach undertaken by your
team for solving it;
Explain in detail how each data inconsistency/issue (outlier, missing value,
duplicates, etc.) was resolved prior to the analysis;
Carefully apply the data-driven approach that your team designed to the data that
you received and “cleaned.” Employ the necessary technical sophistication and
depth, including but not limited to accurate residual diagnostics, model fitting
summaries, and model validation; and
Clearly lay out all the assumptions behind both the data-analytic approach and the
time series models that were used.
Note that there is no set page limit for the written deliverable report. The report should be
typed in Times New Roman 12-size font using 1-inch margins on both sides of each page. In
addition, page numbers and double spacing are required throughout the entire document. All
figures and tables should have clear captions and legends, and should be appropriately
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BAB260
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Amarcord Incorporated
referenced within the text. In addition, figures must have clearly labeled axes. The report should
be spell-checked and follow the proper rules of grammar.
You have a unique opportunity to enhance the business intelligence of Amarcord
Incorporated and help the Bank combat money laundering more effectively. Good luck on your
important mission.
Logistics and Organization
The engagement team will be formed by the instructor prior to the engagement kick-off.
The team will consist of either 5 or 6 members. Throughout the entire project, the team
members are expected to collaborate. Rather than solely focusing on individual tasks, each
student is expected to take full ownership of the engagement and add her/his contribution in all
stages of the work. Collaboration is in the best interest of each student, in light of the fact that
each team member gets the same grade for the written deliverable report. At the completion of
the engagement, students will be required to submit a peer-evaluation assessing the
collaborative skills and effectiveness of their team members.
The instructor will serve as the “client” for the engagement. As such, the instructor will
promptly address any questions, which should be addressed by email or in person during
scheduled status updates or extra appointments scheduled by the team. Note that students are
expected to have meaningful questions regarding the data inconsistencies (outliers, missing
data, etc.) during the first scheduled status update meeting, at the latest. It should be
emphasized that a number of subtleties regarding the data are left out from the caselet and are
instead supposed to be brought to light as a result of thoughtful and relevant questions asked by
students during the first status update meeting, at the latest. Note that, while clearly answering
the questions asked by the team, the instructor will not provide solutions but may instead direct
the teams towards the right approach in case the team is significantly off track with its approach.
During the final presentation, the team is expected to defend its approach by clearly
demonstrating how it works and by carefully addressing all of the instructor’s questions.
Following the engagement kick-off, the engagement team has to determine internally how
to split the tasks among its team members, and who will present what, during the final
presentation. However, there are fixed responsibilities that the instructor has pre-defined for
students to choose from. Note that the role that a student assumes throughout the engagement
should match his/her role during the presentation. For example, the student responsible for
cleaning the data has to present about the data cleaning efforts. The structure of the
presentations for both 5-member and 6-member teams is outlined below. During the first
internal team discussion/meeting, the engagement team should distribute the exact roles by
choosing those from the second column of the corresponding table below.
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BAB260
OCTOBER 2014
Amarcord Incorporated
For 5-member Teams
Team
Role
Member
A
Explain the business problem that the team is
trying to solve and provide a background of the
subject matter (3-5 minutes)
Explain the structure of the data, the cleaning
of the data, and the data-analytic solution (in a
nutshell) that the team is proposing (5
minutes)
B
C
D
E
A
Present the analysis of the 1st time series model
that was used to model the data (5 minutes)
Present the analysis of the 2nd time series
model that was used to model the data (5
minutes)
Present the analysis of the 3rd time series
model that was used to model the data (5
minutes)
Compare models 1-3 and conclude the
presentation (3-5 minutes)
For 6-member Teams
Team
Member
A
B
C
D
E
F
A
Role
Explain the business problem that the team is
trying to solve and provide a background of the
subject matter (3-5 minutes)
Explain the structure of the data, the cleaning
of the data, and the data-analytic solution (in a
nutshell) that the team is proposing (5 minutes)
Present the analysis of the 1st time series model
that was used to model the data (5 minutes)
Present the analysis of the 2nd time series model
that was used to model the data (5 minutes)
Present the analysis of the 3rd time series model
that was used to model the data (5 minutes)
Present the analysis of the 4th model (can be
any model, not necessarily a time series model)
that was used to model the data (5 minutes)
Compare models 1-4 and conclude the
presentation (3-5 minutes)
The engagement team will email the instructor, no later than the date set by the instructor
at the engagement kick-off, of the exact task assigned to each member.
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BAB260
OCTOBER 2014
Amarcord Incorporated
Scheduled Status Updates and Deliverables
The following is the list of the status updates and deliverables that the engagement team is
required to adhere to. The deadline for each of those action items will be announced by the
instructor at the engagement kick-off.
Action Item
Description
Breakdown of E …
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