Software Solutions can Streamline your AML Process

How AML software will help your business

The fight against financial crime is one of epic proportions, with the United Nations Office on Drugs and Crime (UNODC) estimating that around 2-5% of the global GDP (or USD$800 billion to USD$2 trillion) is being laundered annually. As a result, robust anti-money laundering (AML) programs have become a crucial regulatory requirement for financial institutions. 

Issues with AML compliance can lead to fines (and in some cases imprisonment), so ensuring your business is meeting local requirements is critical. Given the specialised knowledge, huge amount of data and continual monitoring required, many firms are turning to bespoke software over manual methods to take care of their regulatory needs.

What is AML software?

AML software is specifically designed to verify customer details, analyse transaction data and detect any suspicious activity. It ensures compliance with legal requirements and can be used in conjunction with a firm’s wider AML compliance program.

How does AML software help?

While different programs vary in terms of functionality and capability, typically they will include the following components:

• Transaction monitoring: allows financial institutions to monitor customer transactions for risk. It identifies transactions involving large amounts of cash or multiple small transactions and combines this data with the customer profile. Suspicious patterns can be quickly identified and flagged. 
• Know your customer (KYC): involves verifying and storing identification and other documents for new customers. AML software can manage this process, ensuring that all documentation is collected and securely stored. 
• Name screening: AML software can quickly identify, block or flag people who have been placed on any high-risk or ‘blacklist’ registers. It can also screen for Politically Exposed Persons or individuals with adverse media coverage who may present a greater risk to an organisation.
• Compliance reporting: is critical given the regulatory requirement for AML compliance programs. In New Zealand, annual reports must be completed and submitted to the Department of Internal Affairs. Compliance reporting is therefore an essential feature of AML software.
• Day-to-day compliance requirements: AML software can be used to monitor and track an organisation’s compliance requirements. This includes records of any employee training, audits and submitted reports.

Why AML software is now more important than ever

With the rise of e-commerce, social media, online banking and peer-to-peer platforms, fraudsters have a raft of new ways to launder illicit funds. As a result, regulatory and audit requirements have tightened and correspondingly, the AML software market has grown. 

It’s no longer reasonable to expect an AML officer to manage the large amount of data and analysis involved in an AML process with the efficiency and accuracy that software can offer. So, while technology is fuelling new ways to launder money, it’s also providing solutions.