AML Screening Software

An AML software works by using artificial intelligence to optimize compliance-related tasks, such as transaction monitoring. Additionally, it should offer sufficient data for institutions to examine a customer, transaction, or series of transactions from multiple angles.

A proper software solution works by analyzing data from third-party sources. That means it identifies high-risk customers, automates the screening of adverse media, and, more importantly, helps the company collect and keep reporting data regarding suspicious activity report (SAR) requirements. That’s why some AML software solutions can generate detailed reports to provide regulators with a clear and defensible view of the organization’s compliance efforts.

Companies that are regulated by money laundering regulations, such as commercial banks, insurance companies, fintechs, luxury goods firms, etc., are required to perform AML screening and monitoring procedures to meet these requirements. In order to achieve this goal, they typically choose to automate some tasks that require AML software capabilities. 

Most standard automated AML software solutions have these features in common:

• AML screening. Detects and screens customers against PEPs and sanctions lists or global watchlists, always updating the data and comparing it to a high-risk database.
• Transaction monitoring. Identifies suspicious transactions and flags them in real-time, sometimes using custom rules to detect patterns, such as structuring. 
• KYC and KYB checks. Verifies both customers and other companies to onboard them safely, maintain verified business relationships, and better assess high-risk entities.
• Risk assessment. Determines the customer’s or another organization’s overall money laundering risk based on certain factors, such as the operating industry, geographical location, etc., helping build more accurate risk mitigation strategies.

Managing AML processes is a complex task, requiring detailed review of documentation and filling of reports. For example, SARs should be submitted in a timely manner; otherwise, the company can face sanctions and lose its credibility. An AI-powered AML software makes compliance officers’ work more efficient by reducing manual tasks.