AML: the smart money is on automation

Following a number of high profile money laundering cases, not only is Anti Money Laundering (AML) compliance here to stay, but it’s likely to become more stringent in future.

Compliance checks have to be done, it’s the law, so why not make it as easy as possible by utilising the technology available?   Technology is transforming the way we comply with AML regulation. It is providing a consistent approach, reliable outcomes and convenience, with the latest generation of AML technology now available on a mobile phone delivering the ability to comply with AML regulation remotely.

Documents are no longer required for proof of identity, but for those who are still committed to collecting documents, technology can provide the mechanisms to validate passports, driving licences and proof of address.   Forged documents have an ever-increasing presence in our market and technology can detect fakes and forgeries which if left undetected could result in a large claim that could liquidate a business. 

All electronic verification systems have at their heart reference databases; the most common is the full Electoral Roll.  But, in order to comply with regulation, for low risk, a minimum of two proofs of identity and one proof of address is needed; for a higher risk, a face to face client meeting three proofs of identity are required (and remote transaction where the agent doesn’t meet the client).   

These additional checks can come from a variety of sources and manually checking and cross-referencing those takes hours. With electronic verification, the platform can check credit reference databases which will typically give seven proofs of identity from six independent sources from one check - more than enough to satisfy all the AML compliance considerations.  

Screening client names against the latest sanction and PEP watch-lists is also an important aspect of AML compliance, this must be done at the point of engagement and repeated on a regular basis.

Due to the ongoing requirements, this is difficult to comply with manually. However, a good electronic system will perform these checks automatically, at the point of engagement and ongoing - daily, weekly or monthly, dependant on the business’ risk policy.   Electronic verification systems also screen any new customers against databases of known deceased individuals, protecting against fraudulent activity driven by identity fraud.

Any businesses subject to AML processes that are still using documents should try the electronic alternative. Not only will it save a small fortune, but it’s much more convenient, and there is a very good chance it could be made mandatory by the next Anti Money Laundering Directive in 2019, so why not get ahead of the game now?