Mantas Money Laundering Study Finds Technology Helped to Uncover 43% More Suspicious Transactions Than Traditional Manual Methods.

Business Editors

FAIRFAX, Va. and LONDON--(BUSINESS WIRE)--Aug. 7, 2002

Multi-Financial Institution Study Measures The Effectiveness

of Current Anti-Money Laundering Procedures Using

Technology To Help In Compliance Efforts

Mantas, Inc., a leading provider of behavior detection technology for the financial services industry, has administered a multi-financial institution study on anti-money laundering (AML) methods to assess current money laundering surveillance procedures.

The study measured the effectiveness of current money laundering surveillance programs implemented by financial institutions with the use of technology to supplement compliance efforts. Mantas extracted a sample of transactional and account data from multiple global financial institutions, and analyzed approximately 20 million transactions throughout 2001. Mantas' AML technology detected 43% more suspicious transactions than traditional manual methods finding money laundering rings, employee fraud and customer fraud.

The Mantas Anti-Money Laundering solution uses a powerful combination of highly sophisticated pattern recognition algorithms to uncover suspicious behavior and strengthen transactional transparency. The platform alerts analysts and identifies potential money laundering activity by matching data against a library of behavior patterns and regulatory requirements. Some challenges Mantas addressed included aiding the analyst in reconciling inconsistent data, allowing for comprehensive sampling across all units and eliminating the manual tracking of exception reports in a time-intensive manner.

Findings

Using traditional methods, institutions uncovered some suspicious transactions, but still had transactions that went undetected. Comparing traditional manual methods to Mantas' solution, hit ratios (the number of quality alerts/number of total alerts) increased by a large margin:

- Single entities using multiple names, addresses, and account numbers;

- Apparent attempts to avoid reporting thresholds by structuring deposits or
remittances;

- Multiple transactions between remitters and beneficiaries with high dollar
totals;

- Networks of remitters and beneficiaries, including networks involving high
risk business types and entities;

- Clearing and funds transfer activity through multiple correspondent banks, in
order to stay "under the radar";

- Accounts or customers with high levels of transfers to high risk geographies
(FATF 15 countries and bank secrecy havens);

- Patterns of activity to or from high risk entities (i.e.: trading, travel,
export - import companies, casas de cambio);

- Changes in behavior, such as acceleration of large transfers within a short
period of time, or increase in transfers to geographies unusual for the
customer or account;

- High percentage of transfers in large, round amounts (USD and other
currencies), unusual for the type of account;

- High percentage of pass-through and third party transfers and

- Rapid movement of funds ("in and out" behavior)

"Alarmingly, among the millions of transactions analyzed such as money orders and fund transfers our technology regularly delivered a hit ratio more than five times greater than that of the existing rules-based `exception reports' used by financial institutions. Additionally, while some transactions had previously been detected by the institutions, Mantas' platform captured more and provided the context and evidence to support the flagging," said Simon Moss, Chief Executive Officer of Mantas, Inc. "As a result of our findings, the institutions have opened a number of cases that have been, or continue to be, investigated. A large percentage of these were subsequently reported to the appropriate authorities. These investigations would have never been launched had the institutions not utilized technology to support their efforts."

The Mantas study analyzed transactional and account data from multiple global financial institutions totaling approximately 20 million transactions during 2001. This analysis uncovered potentially suspicious activity including:

- Single entities using multiple names, addresses, and account numbers;

- Apparent attempts to avoid reporting thresholds by structuring deposits or
remittances;

- Multiple transactions between remitters and beneficiaries with high dollar
totals;

- Networks of remitters and beneficiaries, including networks involving high
risk business types and entities;

- Clearing and funds transfer activity through multiple correspondent banks, in
order to stay "under the radar";

- Accounts or customers with high levels of transfers to high risk geographies
(FATF 15 countries and bank secrecy havens);

- Patterns of activity to or from high risk entities (i.e.: trading, travel,
export - import companies, casas de cambio);

- Changes in behavior, such as acceleration of large transfers within a short
period of time, or increase in transfers to geographies unusual for the
customer or account;

- High percentage of transfers in large, round amounts (USD and other
currencies), unusual for the type of account;

- High percentage of pass-through and third party transfers and

- Rapid movement of funds ("in and out" behavior)

According to Don Temple, an expert in the area of currency reporting, detection of suspicious transactions, and fraud investigations, "The USA Patriot Act imposes heavy responsibilities on financial institutions, requiring greater vigilance in detecting and preventing money laundering activity. To address these responsibilities, institutions must rely on surveillance systems to monitor their accounts for suspicious behavior." He added, "Currently, most firms have numerous and diverse legacy systems consisting of an overwhelming amount of unstructured, inconsistent data - that can yield incomplete results. Technology can enable a firm's compliance system to take a robust and comprehensive approach and save them a tremendous amount of time so they are able to address real financial illicit activity."

About Mantas:

Mantas is a leading provider of behavior-detection software solutions for the financial services industry. Backed by a powerful combination of sophisticated technology and industry expertise, Mantas boasts some of the most effective tools that banks and brokerages need to combat money laundering, fraud and suspicious trading activity. Mantas products enable firms to reduce risk, improve internal efficiencies, and ensure regulatory compliance. The company empowers some of the world's largest financial institutions, including Merrill Lynch, Charles Schwab, the National Association of Securities Dealers (NASD), and other leading banks and brokerages. Mantas is a Safeguard Scientifics Inc. (NYSE:SFE) partner company and is backed by SRA International, Inc., an information technology firm with decades of experience. For more information, please visit www.mantas.com.

About Safeguard (www.safeguard.com)

Safeguard Scientifics (NYSE:SFE) is an operating company that creates long-term value by focusing on technology-related companies that are developed through superior operations and management support. Safeguard acquires and operates companies in three principal areas: software, business and IT services and emerging technologies.