When it comes to AML compliance, the right solution does more than just tick compliance boxes. It streamlines processes, empowers your team, and delivers a smoother customer experience. Plus, it drives measurable returns on investment—a win for productivity and your bottom line.
If you're evaluating new tools or updating systems, it's important to get the balance right. The key is finding a solution that helps you stay compliant without slowing down operations. Let's compare!
Good for firms who:
In-house
(with modern tech)
- Prioritise client experience
- Seek long-term cost efficiency
- Operate across multiple offices, service offerings or jurisdictions
- Value internal compliance expertise
- Want to closely manage their risk
- Have bespoke compliance processes or want flexibility in onboarding processes
Outsource
- Don’t mind external parties engaging with their clients
- Are resource-constrained
- Have limited regulatory complexity
- Have minimal experience in managing regulatory risks
- Apply a standard onboarding process for all clients
Key Considerations
In-house
Technology Advantage
Modern compliance platforms significantly reduce the traditional burdens of in-house AML processes
Control
Keeping processes in-house with technology support provides better control over the client experience
Efficiency
Automation handles routine tasks, allowing staff to focus on complex cases
Cost Structure
The platform-based approach can be more cost-effective at scale
Data Management
Better control over sensitive client information
Integration
Deeper integration possibilities with existing firm systems
Outsource
Technology Dependency
Reliance on external provider's technological capabilities and update cycle, with limited direct control over technological evolution and customisation
Control Limitations
- Reduced direct oversight of client interactions and compliance processes
- Potential friction in client experience management
- Less flexibility in adapting compliance approach
Efficiency Trade-offs
- Potential delays in handling complex cases
- Standardised processes may not accommodate unique organisational requirements
Cost Considerations
Predictable but potentially higher ongoing external service costs
Data Management
- Increased vulnerability in data transmission
- Less direct control over sensitive client information management
Integration
Limitations on what can be integrated
Additional Strategic Considerations
- Dependency on third-party provider's expertise and reliability
- Potential loss of internal compliance knowledge development
- Reduced ability to develop proprietary compliance approaches
- Increased vendor management overhead
- Outsourcing essentially trades direct control, customer relationships, risk management and customisation for standardised compliance processes.
Costs
Initial Setup
In-house
Moderate
Modern platforms reduce the need for extensive infrastructure investment but may include implementation fees which can include workflow mapping, data migration, system customisation, risk assessment set-up and more
Outsource
Minimal
Leverages existing systems and expertise
Costs
Structure
In-house
- Fixed platform costs with data cost variation based on volume.
- Locked in via contracts
Outsource
- Fixed monthly service fee, fixed per case cost and often a fixed data type cost.
- Service cost is subject to the provider’s discretion
Costs
Ongoing
In-house
Predictable and controllable
- Software subscription
- Data usage costs
- Staff time on implementation, maintenance, and support
Outsource
Variable
- Usually on a pay-per-case basis.
- Can become expensive with high volumes.
- If charged hourly, rates can differ by level of expertise.
Control
Client Relationships
In-house
Complete
Direct communication with clients through white-labelled technology
Outsource
Partial
Third-party interacts with clients for document collection
Control
Processes
In-house
High
Can customise automated workflows and requirements to match your risk appetite and processes.
Outsource
Low
Must adapt to the provider's processes, deviations from the process may incur additional costs.
Control
Quality
In-house
Consistent quality through automated processes and mandated requirements with human oversight.
Outsource
Dependent on the third party’s standards
Resources
Staff Training
In-house
Minimal - Medium
Modern platforms are intuitive and include training resources specific to AML professionals. However, frontline staff may require more training.
Outsource
Minimal
Basic training on how to engage the service
Resources
AML Expertise
In-house
Built-in AML expertise through technology with automated guidance
Outsource
Access to specialist AML knowledge varies by provider
Resources
Allocation
In-house
- Automation handles routine tasks, staff focus on exceptions
- Legally required to have an internal AMLCO for oversight and approvals
Outsource
- Diverts some resources to managing the provider relationship.
- Legally required to have an internal AMLCO for oversight and approvals
Operations
Responsiveness
In-house
Flexible to your needs and priorities
Outsource
Varies with third party’s workload and/or SLA
Operations
Scalability
In-house
High
The technology handles increased volume automatically but may be constrained by internal staff capacity
Outsource
Medium
Likely face provider capacity constraints at peak times
Operations
Auditability
In-house
High
- Automated logging of all actions and decisions.
- Easily accessible.
Outsource
Medium
- Usually includes audit trails but may be less detailed.
- May be difficult to get detailed reports from the service provider.
- Requires constant oversight and audits to ensure quality control.
Operations
Flexibility
In-house
High
Can quickly adjust processes, workflows, risk appetites and requirements through platform settings.
Outsource
Low
Changes must be coordinated with the provider, assuming they allow changes to the master services agreement.
Operations
Risk management
In-house
Strong
Settings and automation ensure consistent application of rules and approaches to match risk appetite
Outsource
Medium
- Master services agreement is generic to meet the needs of multiple firms.
- May not align to your risk appetite.
Operations
Regulatory Alignment
In-house
Automated
Via platform updates aligned to meet regulatory changes
Outsource
Unknown
- Reliant on the provider changing their process to meet regulatory updates
- The speed of update may be limited by time spent on new processes, training etc.
Technology
Data Security
In-house
High
- Relies on your approach to security.
- Software is usually ISO27001 compliant at a minimum.
Outsource
Unknown
- Relies on the provider’s approach to data security and their staff’s approach to physical security (access to the stored data)
Technology
Integrations
In-house
Software-dependent
Outsource
Provider-dependent:
- IT capabilities
- Size of your contract
- Value of your brand to them.
Support
After-Hours
In-house
- Software available 24/7
Outsource
Limited out-of-hours service but can be included with higher-value monthly agreements.
Support
Geographic Coverage
In-house
High
Modern platforms connect to global registries and often include multiple-language support
Outsource
Medium
Limited to local market with access to global data services. May incur additional costs for global coverage.
About First AML
First AML simplifies the entire anti-money laundering onboarding and compliance process. Its SaaS platform, Source, stands out as a leading solution for organisations with complex or international onboarding needs. It provides streamlined collaboration and ensures uniformity in all AML practices.
First AML transforms an otherwise complex and manual process into one that is simple, cost-effective, and compliant for businesses. By delivering efficiency and time savings, it protects reputations and enables companies to stay on the right side of history in the face of global threats.
Keen to find out more? Book a demo today! No time for a long demo? No problem. See what Source by First AML can do for your business in 2 minutes – watch the short demo here.