AML Regulatory Technology

Your AML Compliance Officer has 24/7 access to a digital compliance framework that is fully tailored to the nature, size and complexity of your business.  You will not believe how simplified AML360 has made anti-money laundering compliance.

Ongoing Due Diligence

In the majority of countries, anti-money laundering legislation requires Ongoing Customer Due Diligence (OCDD). OCDD includes keeping customer information up-to-date, customer screening and transaction monitoring. OCDD enables any irregular or suspicious activity to be detected and it ensures the customer’s transactions are consistent with the organisation’s knowledge of the customer and the customer’s risk profile.

Despite very few jurisdictions making automated transaction monitoring mandatory, an organisation will require automated monitoring if the nature and scale of the business demands it. Furthermore, businesses – especially those that are subjected to principles-based legislation – will need to demonstrate their transaction monitoring framework is tailored to the risks of their business and that it effectively manages, mitigates and detects money laundering. At some point the business may also need to evidence this to their regulator.

What therefore ensures an automated TM system is effective? Below are some guidelines that businesses should consider when evaluating automated monitoring software.

Vendor Selection

The starting point is to ensure that the vendor’s TM system is the right software, not only in its monitoring capabilities but also compatibility with existing hardware.

Common mistakes made by many businesses is to purchase anti-money laundering software without having sufficient knowledge about money laundering and therefore failing to appreciate what they require the software to do. If the business does not have anti-money laundering experts amongst their staff, they should engage external expertise (ensuring any real or perceived conflicts are managed).

Anti-money laundering compliance software

Buyer Beware

Buying software that is not appropriate to the business will not only result in a significant financial expense but will also mean the business is not able to meet its regulatory requirements.

System Capabilities

An efficient software tool should provide at a minimum:

  • Customer profile information and customer activity data.
  • Allocation of alerts in a risk-weighted priority status.
  • Link related background information.
  • Provide an investigation audit trail.
  • Provide reports on ageing alerts.

The more information that can be provided from the AML/CFT compliance system, the quicker the analyst can assess the true status of the alert (ie, false-positive or true-positive). Efficiency in investigating alerts will minimise the number of ‘ageing alerts’ (see below).

Data Quality

The software system will only be as good as the quality of the data being fed into it. Therefore careful analysis will need to be undertaken to ensure the data feeds provide the correct sources of information in order to determine suspicious activity (ie, garbage in will mean garbage out).

Any data ‘cleanliness’ or legacy issues will also impact on the efficiency of the software. Businesses should ensure they discuss these matters with the software vendor in order to gauge the capabilities or limitations of the tool.

Paramater Settings

Rules based monitoring systems require regular review and updating of parameters. If parameters are too narrow or too broad, the result will be an excessive amount of ‘false-positive’ alerts, or worse, the inability to detect suspicious activity. Due to the need for each alert to receive human analysis, excessive numbers of false-positives will additionally result in higher costs.