Sameer Malhotra, senior global banking leader, designs operations and technology transformation solutions to prevent financial crimes and fraud

By Ellen F. Warren

Sameer Malhotra is a Managing Director for a global “top 20” financial institution. He previously served as a Managing Director at JP Morgan Chase and Deutsche Bank Group. As a senior global banking leader and expert in banking operations and transformation, he brings three decades of experience to solution design and implementation, risk and control, client onboarding, contact centre operations, governance, change management, and operational excellence.

While he has specialised in international banking for the past 20 years, working with three of the world’s “top five” financial institutions, his career encompasses leading strategic and operations roles integrating technology management for top brands in diverse industries and geographies, including finance, travel and IT services across Asia, Europe, and the Americas.

Throughout his career, Malhotra has specialised in designing and operationalising end-to-end operating models and comprehensive operations management systems, comprising client service, workforce management, recruitment, training, compliance, controls, profit and loss (P&L)/budget, and relationship management.

His ongoing focus is on global financial crime operations, including transaction monitoring, customer and payment screening, client onboarding, client reference data, and quality assurance. Among numerous achievements, he set up the entire regulatory, compliance, risk and control operating framework for a business of approximately $10 billion GTV, which involved scaling up the entire OFAC (Office of Foreign Assets Control) sanctions screening and disposition operating model.  

Malhotra earned a Bachelor’s degree in Economics from Delhi University and received his MBA in Marketing and Finance from the Birla Institute of Management Technology (BIMTECH), both in India.

Pursuing advanced professional education, he completed GE programmes in change management and change acceleration, and earned GE Six Sigma Certification, achieving Certified Black Belt in Six Sigma and LEAN. In 2011, he completed an Organisational Leadership programme for Top Talent Directors at London Business School (UK).

We spoke with him about his career, and how his innovations in global banking client relationships holistic view and KYC operating models are reducing fraud and money laundering risks.

Q: Sameer, in your singular career, you have managed budgets up to $50 million, teams in excess of 1,000 members, and up to 1,200 client affiliates in any given role, for some of the top global banks and organisations.

You’ve also been responsible for a wide array of disparate business lines and functions, ranging from P&L, client onboarding, derivatives, regulatory compliance and many more, to your current focus for at least the past decade on financial crime risk prevention and management. Tell us about your career trajectory and how you came to specialise in this area.

A: My work in the financial crime risk prevention and management area started similarly to bank operations, but as I ventured deeper, my inherent curiosity drove me in the direction of challenging the status quo, asking “Why do we do, What we do (W2D)?”

I constantly questioned whether there could be better ways of solving broader common challenges. This was a continuation of the whole concept of the industry forum (DOIF) that I designed and founded while at Deutsche Bank Group, with my counterparts from JP Morgan Chase and Goldman Sachs, to solve the operational inefficiencies inherent in the industry and reduce risk.

The diversity of my experiences has propelled me into unventured areas, and given me the fortitude to take professional and personal risks. I have always believed that “learning never stops,” and that we can learn from all types of people around us working at all levels.  

I have focused on spending time with the actual analysts who do the day-to-day job to really get the feel of where the “rubber meets the road,” and that has helped in building a strong foundation in whatever I do. 

Q: In the late 1990s, when you earned your MBA in Management Technology, this was still a comparatively new graduate level degree programme at international and US universities. What led you in this direction?

A: I have always believed in the powerful combination of education and experience. Therefore, after completing my undergraduate degree in economics, I worked for few years to gain some practical exposure before going back to books to earn my MBA.

This helped in truly appreciating various concepts around organisational management, people engagement, financial practices, and client and market behaviours, as I was able to cite several real life situations from my work experience in the MBA class, which was not a very common phenomena for those who went directly from undergraduate to an MBA programme. 

An added benefit was that besides the rich practical exposure, I was also able to save enough to fund my MBA education on my own.

Q: As a banking operations leader and Center of Excellence (COE) Head for multiple products and projects, your role often requires you to collaborate with technology and project management leads, with transformative results. For example, in a previous role as Global Head for AML/KYC Client Onboarding and Account Management at Deutsche Bank Group, your team collaborations and oversight produced a 40% reduction in time to market for new clients onboarding.

In your next similar position at JPMorgan Chase in Singapore, you actively partnered with tech team leaders to design and launch a solution and operational leadership for KYC new client onboarding and remediations across 14 countries to fulfill required deliverables for three lines of defense. What lessons can you share about implementing change management on a global scale?

A: Change is exciting, but it also gets a lot of pushback, as with change comes some degree of uncertainty. change management and governance is both a science and an art.

Across the various large initiatives and deliverables in the banking space, and especially more so in the financial crime prevention and management area, there has been huge amount of change in regulation, regulatory expectations, organisational response and solutions, the need to upgrade technology, process management, and the continuous need to upskill talent. This has been to ensure that the organised financial services industry is able to prevent financial crime, and protect its clients/customers and its own reputation.

The most basic lesson is that “change is the only constant,” and those who fail to  adapt will become irrelevant. The other is that given the scale and pace of change, it is critical to take people along, which reduces friction and the cost of implementing change.

Lastly, I always say that it is one thing to do great things, it is another to be able to talk about it. Effective communication across all levels, channels, and time frames is a critical ingredient to be successful on the change journey.

Q: Among your many achievements, perhaps your most career defining innovations were the development of two groundbreaking operating models that set a new standard for banks to reduce the risks of fraud and money laundering.

These are known as the Global Banking Client Relationships Holistic View, and the Know Your Customer (KYC) Reliance Operating Model. Tell us about these systems, and how they have changed the risk management and anti-money laundering (AML) landscape. What led you to develop them? How did you create buy-in for their adoption bank-wide?

A: From a distance, it might seem that everything and all information across financial institutions is well organised, integrated, and easily accessible, which is rarely the case. Most banks are large institutions with very large lines of business (LOBs), and each one LOB is the equivalent of a good sized  bank in itself.

Additionally, many banks have matured and grown either organically or through several large acquisitions or both. Some of those were by design, while others were a way to  manage  financial crises.

After working in this arena for a few years, I realised the critical need to “connect the dots,” as nearly all of the banking challenges that had occurred and were occurring resulted from the industry’s very disjointed way of managing information and data.

It might sound absurd, but obtaining a unified view of a client has been an ongoing challenge across many financial institutions. For example: a bank client might be on the board of directors of a large corporation, and will therefore be profiled by the corporate banking arm of the bank.

The same customer might be a high net worth client and therefore could also be a private banking client. And if that customer holds a credit card from the bank, they would also be a retail banking customer. Now all these three parts of the bank look and profile this client/customer in potentially three different ways, across three different times of the year, and possibly with varying degree of KYC due diligence.

This results in potential weaknesses that have historically helped the “bad actors” to exploit the financial system, as the proverbial right hand does not know what the left hand is doing. My focus has been to plug these gaps by connecting  the dots, which enables effective and efficient client due diligence on an ongoing basis, since you are not doing the same due diligence three times across three different parts of the bank.

This ultimately creates a much better client experience, as in my example above, the client/customer would expect the various financial institution departments to work together internally and not come back to them for the same information multiple times

This again was a change from the stable state that encountered  natural resistance, but by putting the client at the centre, applying “Design Thinking” principles, and showcasing the effective implementation of regulatory expectations, we were supported in driving large scale global change across a large banking institution.

The core principle of “WIIFM” – What’s In It For Me” had to be carefully designed for a wide variety of stakeholders, as the same rationale for making this change would not have worked across the board. Top down sponsorship and bottoms up engagement helped in making this transformation a success.

Q: In many of your positions at leading brands over your 30-year career, you regularly achieved 50% growth in revenues and measurable improvements in operational efficiencies. During this same time period, and particularly in the last decade, we’ve experienced a revolution in emerging technologies. How has this impacted your work over time? Are you using new tools like artificial intelligence (AI) and machine learning (ML) in your global transformation initiatives?

A: It has always been and will be challenging to keep pace with technology. The key is to keep a very open mind, spend time to understand, determine applicability, and be nimble to adapt technological changes.

While there is some apprehension about AI and ML replacing humans in a variety of jobs and tasks, we must remember that these technologies are developed by humans. Therefore, it is prudent to adopt these advances to solve for several mundane tasks and repetitive activities. AI can process high amounts of data and provide humans with a smart set of information that can be applied by people to manage much more complex activities.

In our work, AI and ML is certainly helping to boost productivity and reduce employee frustrations, as they are now able to focus on more value added and complex tasks and produce better quality. Any global transformation without AI and ML will be incomplete and actually redundant, and this is equally true for the financial crime prevention and management space.

We have huge amounts of data, lots of transactions across geographies, multiple changes to client profiles, and market and industry information, which presents a very complex matrix with multiple moving parts. AI and ML are very useful in managing this and providing meaningful, actionable information for risk management. 

Q: With the acceleration of new technologies, bad actors are using increasingly sophisticated ways to perpetuate financial fraud. How do your operating models, and your work in financial crime risk prevention, keep up with these malicious systems?

A: It is a continuous race between the bad actors and the structured financial services industry. Bad actors are spending more time and energy to find innovative means to commit financial crimes, which most of the time involves using the official structured channels of the financial sector to convert the dirty money to clean money.

The operating models that I have focused on have utilised the effective combination of joined up data and information, facilitated by well trained personnel who understand the “bigger picture,” with smart technology platforms to act as a strong enabler. Smart technology on top of broken operating and ineffective operating models will only produce junk, and the same holds true for vice versa.

In today’s world the core issue or concern regarding financial crimes is usually not very obvious and has to be derived by crunching a lot of data, analysing trends, and putting together the jigsaw puzzle, which on the back of core banking practices ensures financial crime prevention. 

Q: In your global roles, you have designed and delivered operational transformation in automation and efficiency by leading operations and technology teams, and created a bank wide AML/KYC COE. Given new technologies, how did this process differ from the earlier COE iterations you developed a decade ago for other financial institutions? Do you have any takeaways to share with other professionals who may be working to implement an AML/KYC COE at their own bank?

A: A lot has evolved over the last decade. Until several years back, the criticality of data and joined up information was not realised; most of the processes and controls were manual, with layers and layers of people checking each other’s work.

With the introduction of smart technologies, a lot of that could be automated, and could operate 24/7, running complex algorithms to produce various permutation combinations that support appropriate and adequate risk management.

For professionals working to implement an AML/KYC COE at their own institution, I would recommend to first understand the risk appetite of the institution, design consistent policies and procedures, define competencies for talent management, and create structured training not only for new joiners, but also provide ongoing refresher and development training, with employee engagement and recognition programmes.

Any such effort must have SMART (Specific, Measurable, Achievable, Relevant, Time-bound) KPIs (Key Performance Indicators), and reporting and review governance backed by innovative technology and tools, which needs appropriate funding on an annual basis. 

Q: You’ve overseen very large and diverse global teams. How do you build collaboration among individuals and teams? And how do you train and mentor younger colleagues? What guidance do you have for anyone seeking to build a career in financial fraud prevention? What do you changes do you foresee in this field over the next decade?

A: Our industry works on people, processes and technology. All three of these areas  have to be optimal and in sync to produce the multiplier benefit. Given the very common global operating model of most banks, wherein they operate across diverse cultures, demographics and preferences, it is absolutely essential for leaders to be highly adaptive, be very active listeners, and customise their employee engagement and recognition practices.

Teams across the globe appreciate the bigger picture, and I have always focused on being able to explain to them how their day-to-day work contributes to the broader and high level organisational objectives, as well as industry priorities. This helps in keeping individuals and teams aligned as they realise their value addition role, rather than just doing few transactions.

Before embarking on training and mentoring younger colleagues, it is pertinent to baseline their competencies and the journey that needs to be undertaken to keep them relevant and progressing towards the ultimate objective.

Anyone seeking to make a career in financial crime prevention needs to be adaptive, very open to learning and challenging the status quo, proactive about staying connected with global trends, and keen to understand technology.

I expect that we will  see  lot of evolution over the next five years. AI and Generative AI will play an important role in preventing financial crime, but at the same time, bad actors will utilise the latest technology to stay ahead.

One area in which there has been limited progress is industry collaboration. Most banks still spend millions of dollars individually every year to support their financial crime prevention agenda, instead of joining hands across large institutions to share common data and information attributes.

It is not a secret that the top 200 clients worldwide bank with the top 10-15 banks, and that is an opportunity that has not been exploited as much as it could be. I hope to contribute to improvements in this area.