Upgrading versus overhauling your AML systems

People have been laundering money since at least the Bronze Age. Because of the government’s prohibition of commercial trading, Chinese merchants of the period would transfer their earnings aboard, and from there into other ventures. This manual form of money laundering is still used today

 

However, four thousand years later, tech advancements have created new, complex digital money-laundering processes that can be nearly impossible to detect using traditional anti-money laundering (AML) methods. Criminals have upped their game and it’s time for organizations to follow suit.

 

Combatting financial crime in 2023

 

Companies have been building their own AML/KYC solutions for years. These legacy systems were built to manage a specific threshold of risk. With criminals using the latest technology to circumvent AML solutions, organisations must also enhance their tools to ensure continued compliance and truly fight financial crime.

 

Today, to be effective, an AML/KYC solution should be taking advantage of new technology such as AI and machine learning and provide a true 360° view of risk. Essentially it should help cut through excess data and false positives so you can understand and narrow in on which clients or potential clients pose the greatest risk to your organisation.

 

AI/ML for AML/KYC

 

With compliance resources always shrinking, advanced technology solutions can be the asset your team needs to ensure continued compliance. These solutions coupled with strong data assets create time in your day to focus on the real risk to the organisation. They take care of current manual processes, repetitive tasks and false positives/negatives so you can focus on areas that matter most to your organisation. Using an advanced technology solution for AML compliance can provide your team with:

• Up to 80 per cent reduction in false positives
• Up to 77 per cent decrease in onboarding times
• The ability to complete and file a regulatory report in less than five minutes
• Up to a 60 per cent reduction in admin costs
• The ability to review all transactions in a timely manner
• Up to 60 per cent decrease in time to investigate a case

Avoid a blackbox situation

 

When selecting a new solution that includes technology such as AI/ML, it is also crucial to speak to the provider about tracking what the system has done and the reasoning behind it. You always need to be able to understand and explain why and how the solution acted in a specific way. For example, why the tool automatically remediates one scenario versus another. This “explainability” is crucial when speaking to a regulator, as a response of “I don’t know, the AI did it” is never acceptable. Before adopting new tech, speak to the provider about how their solution works and ensure you and your team fully understand the technology and how it will work for your organisation.

 

A true view of risk through integration

 

Each day you juggle new client assessments, changing client risk levels and regulatory requirements, all while adhering to strict deadlines. With multiple priorities and significant repercussions for non-compliance, figuring out what needs your immediate attention can be a challenge.

 

The latest AML/KYC technology solutions can help you stay focused on managing your riskiest clients first. Integrating your legacy systems and AML solutions into a single solution (KYC, sanctions screening, transaction monitoring, risk scoring, case management and regulatory reporting) will:

• Provide a 360-degree view of the client (personal data, sanctions info and recent activity)
• Easily determine which clients have surpassed your organisation’s risk threshold
• Make investigation and regulatory reporting faster and easier
• Streamline workflows to focus on real risk versus clearing false positives

Most AML technology solutions can be rolled out over time. This means you don’t need to overhaul your entire system to start realising the benefit of new and advanced technology solutions. With proper integration and the right technology solution, you can start to move your compliance function from being seen as a cost centre to the organisation centre.

 

From cost centre to cost saver

 

There is always a cost to investing in new AML technology solutions. However, by choosing the right solution you can reduce false positives, consolidate point solutions into one solution, automate manual processes and reduce the overall workload, allowing you to quickly realise a positive ROI on the investment.

---

Visit the Alessa website to learn more about our AML compliance solution or book an ROI meeting with a risk expert to see how the advanced Alessa solution can help you realise the benefits of incorporating AI/ML into your compliance programs.

---

By Holly Sais Phillippi, CEO of Alessa