Money laundering is a growing and lucrative business. From “pig butchering” scams to Ponzi schemes and check fraud, criminals are finding inventive new ways to exploit weaknesses and line their own pockets. And it’s your duty to stop them.
By following the obligations and responsibilities outlined in anti-money laundering (AML) regulations, you’ll be better able to identify and prevent financial crime. However, this isn’t always as simple as it sounds.
According to a recent risk report by the Home Treasury:
“Some banks still struggle to implement corrective actions for issues identified in examinations within the necessary time frames, including implementing an adequate system of AML/CFT internal controls or filing SARs in a timely manner.”
These issues are further complicated by the rise of open banking and collaborations with third-party fintechs. With more touchpoints to investigate and less insights into transactions, financial services institutions certainly have their work cut out for them.
To ensure compliance and avoid hefty regulatory penalties, you need to bolster your defences. How? By adopting watertight AML compliance software.
7 typical features of AML compliance software
AML compliance software is a tool or set of tools that allow you to track current and historical transactions, monitor client behavior, pinpoint indicators of risk, and report any instances of suspicious activity.
You may choose to either purchase an out-of-the-box AML compliance software or build your own using the platforms, tools and resources you have to hand. Either way, it’s important to make sure your solution has all the features necessary to mitigate risks and improve compliance.
With that in mind, here are seven features that are essential for your AML compliance tool:
1. Real-time transaction monitoring
AML compliance solutions should be able to monitor client transactions and flag any suspicious behaviors, such as unexpectedly large cash transfers. This immediate response allows you to investigate high-risk customers and, ultimately, reduce the likelihood of money laundering.
2. Integration with CDD and KYC Processes
Know Your Customer (KYC) and Know Your Business (KYB) standards, which include continuous Customer Due Diligence (CDD) checks, are essential for verifying legitimate identities, unearthing risks, and preventing fraud.
With an AML compliance tool or business process automation (BPA) software, you can automate these processes to reduce the likelihood of errors and ensure process compliance.
3. Risk assessment and scoring capabilities
A good AML compliance tool will allow you to consolidate your data points, find risk patterns, and assign scores to customers, businesses, and individual transactions. This helps you to prioritize and escalate the most high-risk cases.
4. Case management and workflow automation
With so many transactions and clients to monitor, it can be difficult to keep on top of every case. A built-in ticketing system, kitted out with service-level agreements and statuses, will allow you to progress investigations, assign responsibilities, and track resolution with ease. This bird’s eye view into your case management efforts will ensure no stone is left unturned.
5. Automated evidence collection and regulatory reporting
When the time comes for your annual AML compliance audit, the last thing you want to be doing is searching high and low for the necessary documents, policies, and reports.
With the right backend solution, you can collect audit evidence throughout the year — whether that’s employee training records, risk assessments, or suspicious activity reports (SARs). You’ll also be able to generate compliance reports automatically, which can reduce manual error and free up your teams for more important tasks.
The result? When your external audit rolls around, you’ll already have everything you need to satisfy your auditors.
6. User-friendly interface and training support
No matter how critical a piece of software, your employees will only use it (and use it well) if it’s intuitive.
Therefore, a good AML compliance tool or build-your-own solution should provide:
- Drag-and-drop functionality to simplify page building, reports, and content generation.
- No-code e-forms and workflows to allow any employee to build effective compliance automations without the need for IT support.
- Vendor-provided training and onboarding support to help your employees get to grips with the platform as quickly as possible.
This will lead to greater user adoption and more efficient AML workflows.
7. Policy management and secure external communications
More and more firms are working alongside fintechs in a bid to differentiate themselves and improve customer experiences. While this can be great for boosting competitiveness and increasing your share of wallet, it does pose some compliance concerns.
Although third-party companies often handle deposits and transactions, it’s still the responsibility of the bank or financial institution to ensure AML compliance. Thus, it’s important for both parties to align responsibilities and establish best practices.
With certain platforms, such as Claromentis, you can build a secure extranet to share policies and knowledge documents. This bridges the communication gap and ensures your AML efforts align.
How Claromentis can support your AML compliance efforts
As the wave of financial crime soars higher and higher, organizations will have to work harder to protect themselves and their customers. You don’t want any illegal finances pouring in or pouring out.
The best way to seal the cracks and keep your business compliant is to lean on the right technology solution.
Although Claromentis is not a dedicated AML tool, you can use elements of our solution to augment your compliance efforts. Comprising intranet, e-learning, and business process automation capabilities, our full integrated digital workplace empowers you to:
- Build highly customizable, no-code automations to standardize your KYC processes, automate evidence collection, and streamline your investigative workflows.
- Store accessible, version-controlled policies and risk assessments in our policy and document management applications.
- Integrate third-party software, such as KYC and CDD tools, to centralize your data, build visual reports, and fast-track investigations.
- Educate your employees on the latest regulatory obligations with engaging and trackable e-learning courses.
- Communicate upcoming regulatory changes with urgent announcements and company-wide news articles.
- Secure sensitive information and case files with granular permissions and IP-based access controls.
By automating your workflows, centralizing your important data, and boosting efficiency across your teams, you won’t just improve your AML compliance. You’ll provide a better, more dependable service to your current and future customers, too.
To find out more about how you can harness Claromentis for your compliance needs, book a no-obligation discussion call with one of our experts.
