Innovations in Identity

AML Compliance Building Compliance-Respect Through Innovation

AML Compliance – Overcoming Regulatory Barriers with Innovative Solutions

AML Compliance Building Compliance-Respect Through Innovation

Anti-Money Laundering (AML) compliance is tough. Tough on prospective customers; a Thomson Reuters study notes it takes an average of 26 days and 4-5 document requests for banks to onboard a customer . Tough on compliance; there are complex, changing legal requirements and huge potential fines for compliance failures. And, tough on the bottom line; along with competition, regulation is the largest barrier to growth for banks in 2017.

It’s not just banks that have to worry about AML compliance, of course. All financial institutions (FIs), money services businesses, financial services providers, and retailers (who cross threshold amounts) have to satisfy compliance obligations. Compliance officers protect companies from potential fines, fraud and other damages, while doing their part to keep the world safe from financial crimes. According to Accenture’s 2017 Compliance Risk Study, “compliance’s strategic role continues to grow, with two-thirds of respondents (66 percent) now reporting directly to either the Chief Executive Officer or the Board of Directors.”

To help grow their role and create effective change, compliance needs to embrace the process and tools of change, innovation and technology. New rules regarding beneficial ownership will entail even more compliance procedures. With recent compliance failures, such as the Wells Fargo fiasco or the Russian global laundromat, there will be more scrutiny of existing practices.

AML Compliance Automation

Existing procedures are not cutting it. Manual processes are time intensive, expensive and prone to errors. Why have a customer fill in a paper form, then manually input or scan the data into a computer, check documentation manually by someone who’s not a forgery expert, and copy, file and track paper versions? It’s an ineffective and inefficient drawn-out process, and unfortunately, for many in compliance that’s what it ends up being.

Luckily, digital efficiencies are here to help eliminate the tyranny of paperwork to the dustbin of history, where it belongs.

The future of AML compliance will need to consider Robotics, Machine Learning, Data Analytics, AI, and even Business Process Management solutions. While eventually, you’ll have to learn or hire expertise in a variety of these highly technical areas, you don’t need to start there.

Consider the obligations to obtain and verify customer information. As customer due diligence is a cornerstone to the AML compliance process, verifying customers is the starting point for innovation. Enabling digitization from the beginning sets up a path to seamlessly vet, onboard, monitor, manage, and analyze customers.

Digital Onboarding

Digital onboarding is easier on customers. They no longer have to make a special trip to a physical branch location and wait in line to meet with a representative and manually fill in forms. Now, they can use their phone and sign up whenever and wherever they want. New techniques make it as easy as taking a selfie.

Digital onboarding is also easier on your compliance team. They don’t have to deal with cumbersome paperwork and manually verifying documents. With all the endless typing, it’s no wonder that they make mistakes and errors introduced in this stage propagate down the line. One estimate puts false positives of transaction monitoring at 95-98%, which is a huge burden on resources and many of these trace back to improper data input. Having proper digital procedures that cleanse, standardize and validate the data inputs from the beginning will help the entire process.

Digital onboarding is also easy on executives and the Board. With the ease of digital onboarding processes, companies can acquire new customers faster and easier than before. Instead of increasing head-count, companies can invest in scalable processes that save money and allow compliance to focus on sophisticated fraud cases. Preventing users with phony documentation getting accounts in the first place will avert a string of fraudulent charges.

 

Disclaimer: Trulioo provides no warranty that the information contained in this document is accurate, up to date or complete and in no circumstance does such information constitute legal advice. Any person who intends to rely upon or use the information contained herein in any way is solely responsible for independently verifying the information and obtaining independent expert advice if required.

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