Automated AML Compliance Software: Cutting Costs Without Cutting Corners

Key Takeaways

  • Traditional AML/CFT compliance processes are inefficient and time-consuming
  • Automated AML Compliance Software can help automate various compliance tasks like KYC, Screening, Risk Assessment, Transaction Monitoring, Regulatory Reporting, and Record Keeping
  • AML Software is the need of the hour to remain compliant with Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006 and Tranche 2 amendments

Along with advances in the financial market and enabling technologies, criminals are using technology to conduct illicit activities like fraud, money laundering, etc. The regulatory authorities are bringing in new laws and amending the existing laws to control the menace of financial crimes. Traditional AML compliance methods are not only costly and time-consuming but are highly inefficient in handling ever-increasing transaction volumes. Hence, financial and non-financial institutions are under pressure to stay updated and comply with these ever-changing rules. Automated AML Compliance Software makes it easier for businesses to stay compliant with Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006 and other relevant regulations to ensure they don’t inadvertently facilitate illegal activities such as money laundering and terrorism financing.

Reporting entities are required to comply with various AML/CFT obligations such as sanctions screening, KYC, risk assessment, ongoing monitoring, and regulatory reporting. Automated AML Compliance Software helps regulated entities meet these regulatory requirements and achieve a high degree of efficiency.

Benefits of Automated AML Compliance Software

Automation makes it easier for reporting entities in Australia to stay compliant in smoother and more efficient ways. The benefits of Automated AML Compliance Software include quick decision-making, streamlined tracking and audit trails, improved compliance, reduction in time and costs and smooth communication channels within the organization and external law enforcement agencies.

With automation, businesses can overcome the challenges faced by traditional methods of working, which include the following:

  • Automated AML software helps serve more customers by automating KYC, sanctions screening, and risk assessment processes.
  • Automation in AML compliance processes reduces the room for errors and helps achieve a high degree of customer satisfaction
  • Automated AML Compliance Software helps achieve efficiency in compliance operations.
  • AML Compliance Software helps bring systematization to various tasks like customer due diligence and regulatory reporting and reduces the chances of non-compliance.
  • AML Compliance Software helps implement regulatory changes in no time. The customization options available in the software help implement new rules across the organization.

How Does an Automated AML Compliance Software Help Reporting Entities?

Maximises Operational Efficiency

Complying with AML laws means handling enormous amounts of data adhering to AML laws, which can be complicated, costly, and inefficient if done manually. Automated solutions help reduce costs by reducing time and manual workload and helping businesses stay in line with Australian regulatory requirements, such as those set by AUSTRAC (Australian Transaction Reports and Analysis Centre). It reduces false positives by allowing the compliance team to focus on more critical and high-risk cases. The software can effortlessly perform day-to-day tasks like KYC and CDD.

Faster Decision-Making

By automating the AML process, reporting entities can save time and reduce the resources required for manual compliance checks. A quick analysis of complicated scenarios is done easily without involving the workforce with technology-backed solutions. Even when human intervention is required, the software rapidly identifies and assesses potential risks and flags suspicious activities by giving accurate and insightful results. The compliance team can prioritize and review these results.

For Example, if a customer transfers a huge sum of money inconsistent with the nature of the business to a high-risk jurisdiction, the system will flag it as suspicious.

Streamlined Screening Process

It is difficult to conduct screening manually. All checks against a customer, such as PEPs, sanctions screening, involvement in any sort of crime, court cases, or negative media, can be done in seconds with the help of automation. Name screening software can instantly cross-check individuals and entities against global and local sanction lists, such as the Australian DFAT Sanctions List, OFAC Sanctions List, lists of politically exposed persons (PEPs), and adverse media. This allows for real-time screening of customers during the onboarding process and before initiating high-risk transactions.

Access to global databases

AML Compliance software can be easily integrated with global databases. Such as:
  • PEP Lists (local and international)
  • Sanction Lists (Australian DFAT, OFAC, EU, UK)
  • Negative media news
  • Watchlists provided by law enforcement agencies
This gives the business the advantage of accurately screening a business or entity against these lists in real-time. Further, the changes to the sanctions lists are automatically fetched by the sanctions screening software, which ensures that you always screen a person against the latest sanctions lists.

Scalability

With the help of an automated AML system, higher volumes of transactions can be handled without compromising efficiency or accuracy. Likewise, when a new type of financial instrument is introduced or if there is a change in payment methods, the software can be quickly updated or customized to ensure that transactions involving new products are adequately monitored for suspicious activity.

SaaS-Based Solutions

When an AML compliance solution is procured as SaaS (Software-as-a-Service), businesses can benefit immensely by getting enhanced customization and flexibility, as well as cost-effectiveness and scalability. The ability to easily tailor the solution to fit the size, nature, and jurisdiction of the business ensures that companies can comply with both local and global regulations. Unanticipated changes in the law or new upgrades can be easily deployed as the SaaS model provides a fast and efficient way to update software in response to regulatory changes, enabling businesses to stay compliant without disruption.

World-Class Customer Experience

KYC solutions coupled with the KYC Self-Service module help capture required KYC information in no time. It helps onboard customers quickly, providing a world-class customer experience resulting in a positive brand image and growth in revenues.

Automated AML Systems: A smart way to remain compliant

The cost of non-compliance is always greater than compliance cost. Non-compliance can lead to loss of business, customer faith, reputation damage and heavy fines. However, using automated compliance software can avoid all this. It is an investment that provides benefits in both the long run and short term.

Risk management can be done efficiently. Human resources are saved from error-prone heavy workloads. This saved time can then be utilized for other critical tasks. While it is difficult for all employees to follow exactly the same steps for a compliance process, the automated solution does the work in a systematic manner which can be configured easily.

A significant amount of money can be saved with automation. Below are some key pointers which conclude why it is smart to invest in automated solutions:

  • Saves time by doing the task accurately and efficiently
  • Human negligence can be avoided
  • Saves money as fewer human resources are required
  • Adherence to the law to avoid penalties
  • Helps in brand building
  • Maintains customer faith
  • Easy reporting and communication with government agencies

Conclusion

In conclusion, automated compliance software is the need of the hour. May it be the accuracy of data points collected for the KYC/CDD process, reducing false positives, quick decision-making by processing large amounts of data quickly or reporting in a timely manner, all is possible by automation of compliance processes.

Automated AML Compliance Software can be easily integrated with global databases, which helps with accurate risk assessment. New changes in internal compliance policies or in the applicable laws can be swiftly configured without hurdling the day-to-day operations. Thus saving the cost of non-compliance. Businesses can easily identify potential threats with a streamlined compliance workflow. It helps people stay vigilant against criminal practices and fight against them.

About the Author

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Pathik Shah

FCA, CAMS, CISA, CS, DISA (ICAI), FAFP (ICAI)

Pathik is a Chartered Accountant with more than 26 years of experience in governance, risk, and compliance. He helps companies with end-to-end AML compliance services, from conducting Enterprise- Wide Risk Assessments to implementing the robust AML Compliance framework. He has played a pivotal role as a functional expert in developing and implementing RegTech solutions for streamlined compliance.