AML compliance management may be challenging for some reasons, but there are some solutions to overcome these difficulties.* Let’s discuss the key points of AML compliance once necessary conditions are provided.
Some key points must be considered during the AML compliance processes. Although each country has its own legal procedures and regulations, these are the key points for all financial institutions.
Determining corporate procedures for transaction monitoring and suspicious customer traffic investigations.
Financial institutions must determine AML compliance procedures considering the regulations to make management and controlling processes easier in line with certain standards.
Controlling scenarios periodically.
Creating accurate scenarios reduces false positives. It is advantageous to control the created scenarios periodically in line with the consistency of results.
Focusing on the detection of ultimate beneficial owners (UBOs)
For some cases – they probably indicate illicit money transfers – the ownership structure can be too complicated. At this point, it is hard to detect the ultimate beneficial owner/owners. Nevertheless, the main objective of the investigation should be the detection of the UBOs.
Defining the suspicious transaction typologies, which are declared by Financial Intelligence Units (FIUs), properly to the system.
Transfers between different banks or institutions are prevalent in money laundering activities. If one of the institutions is reporting whilst the other one is not, it is a great problem for the institution that has not reported in terms of credibility.
Sanction and PEPs lists controls are critical.
If the customer whose name is mentioned in the suspicious persons is not detected, it can be a trouble for the institutions. Therefore, the institution must be sure about the system scans all these lists properly considering the name or character similarities. On the other hand, this system must contain advanced filtering options to eliminate false positives. Otherwise, wrong alerts may be annoying if the threshold is kept low.
Accurate reporting and file.
As we mentioned, reporting and file of suspicious activities are time-consuming for compliance officers. It is critical to report and file cases in accordance with the procedures. On the other hand, we also know that since an integrated system has a reporting module as well, it is effective to simplify reporting processes.
Complete inform process to Financial Intelligence Units (FIUs).
There are some important points to be considered during the reporting process to FIUs. These are;
• The identities of suspicious customers should be determined correctly,
• Detailed information about the suspicious transaction should be collected and the reasons should be explained in detail,
• Suspicious customers should never be informed about the investigation,
• Suspicious activity reports (SARs) should be prepared in a requested format and submitted correctly.
Datactive RegTech Solution is an integrated system that enables users to complete all the process of AML compliance through a single platform including reporting and case management modules. Learn how to enhance your AML compliance with Datactive.