The task of selecting the right anti-money laundering (AML) software can be daunting. With so many options on the market, it can be overwhelming to determine which solution is best suited for your organisation’s needs.
One of the key requirements we think you should consider alongside your software selection is how much hands-on support is available to you and your team.
Bear this in mind as you consider the 14 vital questions to ask when reviewing your software options.
1. How effective is the AML software at detecting anomalies and red flags?
The basic requirement of any AML software is that it provides accurate results. Ensure you define your business needs and your risk profile, and consider how well the technology you are reviewing will be able to identify true risk to your business and minimise false positives.
Sophisticated AML software can include a risk framework for your business so that your clients and transactions can be measured against the level of risk you are happy to take on.
2. Will it comply with regulations?
When reviewing AML technology solutions, consider:
- Does it allow you to customise based on the risk level of the customers you are dealing with.
- How quickly are requests dealt with.
- Compliance with legislation.
- The countries you do business with and where your clients reside.
Anti money laundering regulations differ around the world so you should ensure you are choosing technology that can be configured so it complies to the legislation and standards required for a given jurisdiction.
3. Can the AML technology help reduce costs and improve efficiency?
In theory, the use of AML technology and the features it provides should help you save time and money as it can automate many manual processes.
Look for technologies that can automate routine tasks such as alert generation, and that simple transactions and verifications can be completed in seconds.
Ensure you can see the progress of cases and results in real time, can identify suspicious activity, and receive notifications or reminders when important checks are needed or there are additional due diligence tasks required.
For improved efficiency you will also need to check the full range of AML tools you require are provided, such as customer due diligence (CDD) checks, monitoring, ID verification, reporting, politically exposed person (PEP) and sanction screening, and document scanning.
4. What reporting/audit trail capabilities does the software provide?
An essential part of AML requirements around the world is to submit annual reports to the regulators and to maintain records.
As a reporting entity you will also want to be able to access your client records and review for ongoing monitoring and to identify any material changes in your client’s behaviour.
The right software can help you do this effectively and store records ready for your AML annual reports and audit.
It is important that your auditor can easily access your records and view the due diligence you have undertaken on each of your clients.
5. How is customer onboarding and identification managed?
Customer identity verification is an essential process for reporting entities to get right to comply with regulations and to safeguard day-to-day business activity.
Consider whether the software you are reviewing supports risk profiling and verification of customers effectively. You will most likely want electronic identification verification (EIV) to be automated, alongside politically exposed person (PEP) and sanction checks, and escalation processes to exist for more complex cases.
Find out how quickly verification can be done, and what happens when a customer is flagged or a complex case is identified.
6. How well does the software screen clients?
An essential part of onboarding new clients and ongoing monitoring of existing clients is carrying out politically exposed person and sanction screening.
To fully comply with regulations, you should ensure the software you are choosing runs checks against up-to-date databases, and the right checks are being made for your jurisdiction.
Also check whether the software runs customer due diligence checks on customers who have onboarded with you before as not all software will. This may not seem critical, however, if you are taking a risk-based approach to compliance you should do this as it will ensure you are always reviewing customers against up-to-date information and datasets.
Ask what data sources are being used and ensure they are continually being updated with the latest information so you are not using out of date information for your due diligence checks.
7. How well can the AML technology integrate with existing systems?
Ask whether the AML software can integrate with your existing CRM systems and how easy it is to do this. Integrating with existing systems can save time and money as you can avoid double handling of information and provides a more holistic view of your customer.
For example, if you are a real estate agent, it could be beneficial to integrate your chosen AML software with a CRM such as VaultRE, MyCRM or PropertySuite so you have a real-time view of your listings and processes alongside AML verification information.
8. Can the software scale up with growth in business?
Consider the likely growth of your business and whether the technology you are choosing can scale with any growth in your business, an increase in transaction volumes, and identity checks.
Identify what the proportional increase in costs might be, and if the efficiency and speed of results will be affected.
9. What tasks can be automated using the technology?
One of the advantages of AML software is the level of automation available to do more simple tasks.
Look for software that automatically verifies low risk clients and recognises high risk clients needing investigation, and choose a compliant solution which is fully customisable to align with your business risk profile.
10. How easy will it be to use?
While maybe not top of mind, it is important that the platform you are using is intuitive for you and your team so you are happy to use it in your day-to-day compliance activity. You will also want to ensure appropriate users can create, read, update, and delete records as required.
Also, consider the experience of your clients, and how effective the software solution will be for them.
Can the software be white labelled and be tailored to you and your clients’ individual needs?
11. What are the initial and ongoing costs?
Ask what the implementation costs are, plus any ongoing costs for each transaction and/or licensing cost. The price you pay may vary depending on whether you are integrating with your CRM systems or using the AML software as a standalone tool.
Check there are no hidden costs, and how and when price increases are implemented.
Consider whether the solution will help reduce operational costs, enhance compliance, and mitigate risks effectively.
12. What level of data protection and security is used?
It is a fundamental requirement of any business to keep their customers data appropriately secure and protected.
Ask how your customer data will be secured and what measures are in place to ensure compliance with privacy laws. Also check what measures are in place to avoid any disruption or downtime of the system. You will want to access data freely, so ensure the system is reliable and always provides best-in-class availability.
13. What personal support is provided and for how long?
Ensure you ask what support is available with the software plan you are considering. Not all software providers will offer phone, email, or hands on support once you have the license to use their technology. This may not seem critical at the time of purchase but it is likely you will have questions or require some form of support throughout the lifetime of your AML technology use.
In addition, you may want expert advice on complex AML cases, extra help during busy periods, or want to outsource AML tasks such as CDD to an AML provider.. If you do, ensure the company you are choosing has a team of experts available for when you need it.
Being able to outsource to an AML provider who has the human expertise as well as great technology can not only help reduce costs, but also improve efficiencies, and improve your compliance success.
14. Is there a plan for innovation or technical development?
Does the vendor have a clear plan for future improvements and updates, and can they work alongside you to produce the best AML and KYC outcomes for everybody?
With the fast-moving pace of technology advancements, it can help ensure you remain top of your game by working with a partner who can continually enhance and adapt processes in line with changes to regulations or technological improvements.
Final thoughts
AML software can be a huge help in streamlining activity and reducing costs but choose carefully as not all solutions will be right for you and your business.
It is important to make a thorough evaluation to find one that best fits your specific business needs. To make an informed decision, request a demonstration of the software to see how it can streamline your AML processes.
By taking these steps, you can invest in a solution that will benefit your business in the long run.
Start your AML software journey with us!
About the author
Jerome Cookson
Jerome is tic company’s Chief of Revenue and Product, where he applies his extensive background in finance and building operational capabilities. Originally from the UK, where he ran the family business, involved in property investment, company and land acquisition for renewable energy sources, he moved to New Zealand in 2011 with his now-wife.
