Gain real-time monitoring with Fraud.net’s AML Solution.

Increasingly sophisticated and organized money laundering schemes are requiring more robust detection and monitoring capabilities. Your financial institution needs to transform its perspective on AML compliance. Mindsets need to shift from a compliance and task orientation to creating opportunities for competitive advantage. An AI-powered AML solution will undeniably improve process efficiency, lower the cost of compliance, reduce false positives, and enhance the customer experience. 

The following are seven decisive actions your financial institution needs to take to improve, automate, and accelerate your AML compliance process.

1. Create a Strong Governance Framework

The core of a KYC/AML program is a formal and robust governance structure. Your leadership team needs to take an active involvement in AML risk management and to ensure the compliance, risk, and audit teams are carrying out the necessary reviews and providing ongoing updates on status. 

2. Consolidate Financial Crime-related Systems, Data, and Processes 

Coinciding with the need for AI/ML in your AML compliance process is the requirement to consolidate your financial crime data. Siloed data is the bane of timely and effective AML analysis. Amalgamating your financial crime data brings benefits beyond AML – including fraud prevention, cybersecurity, credit risk, and other areas. 

Consolidating and augmenting your data provides a 360-degree view of potential financial crime transactions, customers, and counterparties. Unifying your systems results in a cascade of improvements:

  • Data orchestration
  • Analytics
  • Case management
  • Reporting
  • Governance

3. Deploy AI/ML to Quickly Detect Anomalies

For a more efficient, automated, and highly effective AML compliance process, utilizing AI/ML models is a necessity. With machine learning, a model can offer forward-looking detection of anomalies. No longer are you relying on individuals to analyze reams of data to detect a possible issue. Your analysts can now focus on the alerts driven by the system to reduce backlogs, errors, and creating more timely identification of potential money laundering.

4. Reduce False Positives without Increasing False Negatives

In traditional rule-based AML models, the simplicity leads to large volumes of false positives. AI/ML models are proven to reduce these numbers dramatically as they are much better equipped to detect anomalous behaviors and transactions.  Furthermore, they can support your financial institution through the entire cycle, from the KYC processes to monitoring of transactions and entity relationships. 

5. Dynamic Updating of Customer Profiles 

Data is the spotlight required to detect and visualize money laundering conspiracies. With the need to perform near-continuous monitoring, all applicable internal and external data is necessary to employ dynamic updating. 

Complementing AML solutions, a perpetual KYC program is becoming the norm to stay ahead of the money launders. Your AI-driven system needs to be capable of updating customer profiles every time there is a material change based on internal and external sources. 

6. Securely and Anonymously Share Data 

The continued global growth and complexity of money laundering requires new approaches. One of these approaches is the trend of financial institutions to share applicable information, including: 

  • Entity information, across banks and jurisdictions

  • Anonymized AML model performance for new insights on criminal behaviors and their patterns
  • Collaborating throughout the compliance value chain – KYC, sanctions screening, adverse media, PEP, and other elements. 

Sharing information offers your firm the ability to better understand the structure of the schemes to  detect and stop money laundering.

7. Develop a Risk-aware Culture

Creating a risk-aware culture that involves all relevant employees, not just the compliance, risk, and audit teams, provides your company a more formidable first line of defense. Leadership must create an environment that encourages raising possible issues and asking questions. 

Building a risk-aware culture also requires keeping your employees aware and updated regarding AML on a regular cadence:

  • Management needs to lead and ensure employees take part in tailored AML training. 
  • Training needs to be scheduled regularly to aid in retention. Too many financial institutions only provide employees with the training as part of onboarding. 
  • Providing regular compliance training not only helps cover ever-changing updates to tactics and regulations but instills the importance of AML compliance. 

The bottom line is that improved technology, increased collaboration, and more involved governance are the way forward to help your financial institution enhance AML compliance and stem money laundering. Implementing AI/ML technology and other improvements will automate and accelerate your processes, thereby lowering the cost of compliance and improving the program’s overall effectiveness.  

Fraud.net’s Comprehensive Solution

We support dozens of bank’s KYC/AML compliance processes, including identity screening and monitoring, and transaction monitoring. Our AML solution offers integrated screening and monitoring capabilities across the customer lifecycle from onboarding to reporting. Plus, you have the flexibility to write rules that match your institution’s requirements for checking if the applicant, customer, or counterparty’s name appears on any sanctions or watchlists. 

Your organization can also customize queries to include specific lists, fuzziness, and match types, including sanctions, PEPs, and adverse media. Additionally, you can achieve a more robust fraud data set by being part of a large data consortium through our Collective Intelligence Network. Our solution is strengthened by partnerships with ComplyAdvantage and Jumio

Read more in our eBook, 7 Steps to Automate and Accelerate Your AML Compliance Process. To learn more and talk with an expert about how we can improve your AML process, contact us today for a free demo.