With the dynamic nature of the risks in money laundering and terrorist financing, banks need to improve their AML compliance programs. A well-equipped bank can monitor activities, detect suspicious transactions, and comply with regulatory requirements using suitable AML solutions.
This is now a program that can only be left with proper attention. It is regarded as a necessity amidst banking regulators who are serious about compliance, burdensome in imposing rules, and who actually punish in terms of fines for cases of non-compliance. There is also an increased interest on the part of customers for banks that demonstrate good controls against financial crime. A comprehensive suite of AML solutions adopted by a bank can offer a significant improvement in its compliance posture, more effective risk management, and more trust by stakeholders.
Let us discuss the 7 best AML solutions that every bank must consider to protect itself and support efforts toward compliance.
Comprehensive Transaction Monitoring
The strength of a good AML program lies in effective transaction monitoring, which is achieved by using sophisticated software tools. Almost 75% of financial crimes are discovered by transaction monitoring. AML solutions today use AI technology to process 100% of transactions and account activity to identify suspicious patterns.
It helps the banks move on from the manual alert review process. Real-time monitoring also ensures timely filing of the currency transaction report (CTRs). Tier I solutions in transaction monitoring are a must for banks that conduct high amounts of transactions daily to raise the bar of their aml compliance solutions.
Enhanced Customer Due Diligence
This is the factor upon which the activities relevant to risk-based customer due diligence hang: the need for comprehensive customer profiles and an ongoing risk assessment. The AML software solutions now provide automated workflows to enhance the efficiency of conducting CDD and ongoing monitoring. With changes in regulation, proper CDD can be used to verify the customer’s identity and monitor the accounts at the highest risk.
Leaders in aml compliance solutions are providing their customers with risk scoring and segmentation abilities to get a sharp focus on complex customers. 35% of compliance failures were due to insufficient CDD. Proper tools for the right CDD are essential for banks to collect adequate information to support their programs.
Sanctions Screening
Sanctions screening of customers and transactions against global watchlists is a regulatory must. However, manual reviews often need to include critical details. Advanced AML solutions using AI and machine learning can screen 100% of customers and payments against lists of sanctioned individuals, countries, and entities.
This helps improve the accuracy of manual checks from 70-85% to over 95%. Penalties for sanctions compliance failures have increased threefold in the last year. An advanced sanctions screening product is beneficial for banks as well because they can ensure risk-free transactions.
Watchlist Filtering
Advanced AML solutions have automated watchlist filtering that monitors customer databases and transactions for any name matches. Advanced AI AML solutions have automated watchlist filtering, which monitors customer databases and transactions. Any potential matches, making the identification of alert-worthy cases far more objective than manual checks.
60% of financial institutions miss out on weekly watchlist updates, which can impact investigations. There is a dire need to bet on technology solutions that integrate multiple global and domestic watchlists into their AML compliance solutions, ensuring that banks take advantage of potential red flags.
Suspicious Activity Reporting
AML solutions for banks should also aid in meeting stringent reporting requirements. Along with robust transaction monitoring and filtering, integrated case management functionality in top solutions makes sure that only genuine suspicious activities make their way to regulators through structured reporting formats. This saves time, which otherwise would be spent on manual collating information. Over 30% of the SARs filed by medium banks needed complete or accurate data. Intuitive reporting modules do away with such errors and better support compliance mandates.
Case Management
Case records are then generated, and the process of investigation, analysis, and maintenance of the case is initiated. Advanced and compliance solutions that are equipped with solid case management systems. At the core help supervisors and staff manage very high volumes of workloads seamlessly. Features such as the ability to assign owners to tasks, tracking of status, adding notes, and the ability to pull together all related records in one place.
Most financial institutions have about 20-25% of their cases classified as suspicious that remain pending investigation for more than 60 days. Top case management tools, therefore, are the investments that are made in other technology solutions.
Regulatory Reporting
Banks need to be compliant with strict reporting guidelines to meet regulators and avoid penalties. However, preparing pieced-together reports is a redundant and error-prone process. Top AI and solutions are equipped to streamline reporting processes with the template-based filing of CTRs, SARs, and other reports. Integrated solutions allow submission on time to different regulators by pulling data from transaction monitoring, screening, and case management systems. Automation eliminates 25-30% of the work effort spent earlier on preparing reports. Customizable but standardized reports that are prepared with the most deployed aml solutions. For banks eliminate headaches related to the interpretation of guidelines or missing out on some crucial details.
