Anti-money laundering regulations are constantly updated to reflect the quickly changing nature of financial and cyber crimes. While this is positive, it can create a burden on businesses looking to ensure proper AML screenings, creating roadblocks in reducing risk.
Generally speaking, AML processes are typically overrun with bureaucratic inefficiencies, which can result in both false positives or negatives. Therefore, a new methodology for AML is needed, allowing organisations to quickly and effectively screen potential third-parties or clients. In short, leave behind traditional AML – Smart AML is here.
Smart AML takes an analytic approach, using data as a basis for ongoing screening and risk monitoring, allowing organisations to make informed mitigation and management decisions. Using a tool like CyDesk, onboarding vendors or clients can be streamlined, consolidating a typical AML questionnaire with other data about the third party. This also allows organisations to be alerted to custom red flags, highlighting potential concerns that may be crucial to their processes.
Key to Smart AML is the idea of ongoing monitoring – AML should not be a one-time occurrence. As threats or other news develops, organisations should be aware of the status of their third parties, and the potential implications of these events. Therefore, if a client is entered into a Politically Exposed Persons (PEP) list or a business is associated with a country that has been newly sanctioned, organisations can effectively respond.
Finally, Smart AML solutions keep records of audits and other key data, which can be used either to escalate an ongoing situation or simply report as required by AML regulations. Removing the hassle of reporting lessens the risk of non-compliance and sizable fines.
Thinking about streamlining your onboarding process, or looking to continuously monitor your risk? Schedule a demo of CyDesk today.
This is part of a series of blogs on topics associated with Anti-Money Laundering. Check out our previous pieces on AML Directive Updates, KYB and the most effective approach to AML.