What are the benefits of anti-money laundering solutions? (2024)

Anti-money laundering (AML) solutions help regulated businesses comply with regulation and control risk. Organizations don’t want to be embroiled in money laundering activity because of a) heavy fines for non-compliance, b) reputational damage from being associated with crimes like human trafficking and modern slavery, and c) personal liability that can come with a prison sentence.

There are many benefits to financial institutions using automated anti-money laundering solutions (AML) and getting it right is important.

Automated AML solutions can be tailored to orchestrate any workflow of checks needed to complete due diligence and meet compliance standards set by regulators. AML laws vary from region to region, and compliance requirements might be different for each product or customer-type, so AML solutions need to be adaptable to meet these requirements. Flexibility is also important in an AML solution because threats and regulation can change quickly, and also because a financial institution needs to be able to create an instance of the solution based on their company’s policy and risk appetite.

Anti-money laundering policies are, first and foremost, an important element of compliance for financial institutions. They form the basis for how a business will act towards financial crime and the decisions it will make about whom to work with.

An AML policy should be available to all employees, it should influence culture and commercial decisions, and it should also inform how customers are vetted and which ones are onboarded.

A robust AML policy enables staff - from sales to compliance - to reach more unified decisions about whether a customer “fits” within the firm’s risk appetite. The policy should enable legitimate customers to gain access to products or services swiftly, while stopping “bad actors” accessing legitimate financial structures.

Foundational to any AML solution is a company’s risk policy as it automates the compliance standards the institution will be held to. It will inform which due diligence checks are needed, what data is gathered, and what decisions are made about customers.

Companies can use an AML solution to digitally transform their specific risk policy, automating which checks are needed to verify a customer. Then institutions can use the data from these checks to create a risk profile and understand the likely threat a person or entity poses to their business.

AML solutions should enable financial institutions to make decisions with confidence about onboarding, off-boarding, and ongoing monitoring.

There are many AML solutions available to financial institutions - AML analytics; transaction monitoring; know your customer or KYC solutions; sanction screening tools. Historically, processes have been manual or fragmented, and there are key features that make end-to-end automated AML solutions efficient and effective.

The benefit of AML solutions is they help financial institutions achieve compliance with global AML regulations. They also reduce manual effort needed for customer due diligence, which can otherwise be time consuming. Efficiency in compliance processes, in turn, can create better experiences for staff and customers.

An AML solution can enable teams within an organization to interact with a due diligence process. Sales and compliance, for example, can review customer profiles, or compliance managers can deal with escalation of high-risk cases, while everyone can see the outcome of decisions.

And AML platforms can demonstrate due diligence processes to auditors and senior management; maintain a history of decisions and remedial actions; and identify where performance issues or delays in processing exist, to drive future efficiencies.

Through digital transformation of an AML risk policy, all parties can maintain the same compliance standards set at company level. Automated AML checks tailored in line with risk policy means customer onboarding and monitoring processes are handled consistently, swiftly, and seamlessly. And if changes are needed due to new regulation or a change in risk appetite, the digital nature of the solution makes it adaptable.

Moody’s Analytics Know Your Customer (KYC) is transforming risk and compliance, creating a world where risk is understood so decisions can be made with confidence.

Our customers build their own compliance ecosystem using our workflow orchestration platform, leading datasets, analytical insights, and integrations with global providers to create flexible solutions to onboard and monitor customers at scale.

Get in touch to talk about your AML program – we would love to hear from you.