Economic entities operating in the European Union, which under the applicable law are obliged to implement the provisions of the fourth and fifth AML Directive face many organizational and legal challenges.
The implementation of effective and effective methods of counteracting money laundering and terrorist financing is a challenge for the entire enterprise.
At the same time, an efficient and effective AML solution must be neutral to the standard operating activities of the enterprise.
Figuratively speaking, the compliance department should be transparent and should not interfere with the standard activities of the enterprise.
regardless of whether we are dealing with a bank, leasing company, factoring company, insurance agent or currency exchange, it is important to effectively provide services to the end customer without much involvement in onboarding processes.
Unfortunately, as practice shows, many companies face the problem of effective implementation of AML tools, and compliance departments are often criticized for imposing too much obligations on operational departments.
In addition, end customers who are presented with various statements and questionnaires report their concerns and ask about the purpose of these activities.
It is probably very difficult to explain to each client separately what AML and CFT procedures are and why it is subject to screening.
The ideal AML mechanism should be completely transparent to the end customer so that he does not even know that he is participating in the onboarding process.
Companies such as Machine Mind Limited are working on client risk assessment systems based on behavioral parameters collected in an internet browser environment, in which a registration form or application for a loan, leasing or factoring is filled out.
Modern mechanisms use machine learning to make decisions and suggest a calculated level of customer risk.
With the development of services whose sales process is carried out remotely, the need to ensure the automation of risk assessment processes and AML CFT increases.
Due to the fact that more and more cases are handled via the media such as the Internet or telephone, the officer responsible for risk assessment has no physical contact with the client.
Therefore, compliance departments must adapt to the changing reality.
Recent events related to the coronavirus pandemic have only accelerated the digitization process.
Screening automation tools – must have of 2020
The number of insurance policies as well as loans granted via the Internet increases significantly.
Online currency exchange offices are replacing stationary exchange offices, and more and more factoring companies are preparing IT systems designed for remote customer service.
In order not to lose effectiveness or block the development of services sold remotely, compliance departments must prepare for a new reality.
Risk assessment questionnaires or behavioral behavior analysis can be implemented by specialized IT systems.
By using services from external suppliers – such as software for searching sanction lists and for verification on Pep lists, we can significantly speed up and increase the efficiency of the risk assessment department.
Automated screening of sanctions or political status can be outsourced without generating high costs. Easy integration with the company’s external systems means that they can be implemented and implemented in just a few weeks.
Verification of a single customer on sanction lists and checking his PEP status takes less than half a second, so the answer can be returned to the customer’s IT system virtually immediately.
The recently implemented UBO Registry in UK Companies House , which provides an API interface, allows such automatic screening tools to download information about the real beneficiary based only on the company’s VAT number or company registration number.
All these facilities and the digitization of an increasing number of processes and sharing databases using APIs is an effective fuel for the further development of AML process automation.
We will continue to follow the development of tools available in this industry and present technical and organizational news here.