The late 2000s saw the rise of third-party contractors for various business processes, from customer service to finance. Speaking of 2023, companies in the FinTech and banking sector are understandably very careful about their data and processes. In particular, many business owners are uncertain about what exactly is needed for effective anti-money laundering (AML) efforts. So, there’s still some hesitation towards investing in 3rd party solutions for AML reporting compliance.
There are a lot of questions that prospective clients of such 3rd-party AML software will ask. First, will using third-party software be antithetical to a bank’s AML procedures, which should be as guarded as possible? Second, will third-party solutions increase risks and decrease the control that financial organizations have over their AML processes? Third, is it worth the money to onboard new software if banking staff can handle the AML reporting internally?
Creating a custom AML solution is another choice. Contracting a software development company having experience in serving in the finance and banking sector can solve the problem. You own the AML reporting solution and the data is safeguarded. Consequently, going this route can make AML compliance fully secure in 2023.
Allowing illegal money deposits and failure of AML reporting can land your company in hot waters. Third-party AML software and custom AML solutions benefit your company in the AML compliance process. Both options help financial institutions in maximizing their acquisition.
The following is an argument in four parts that depicts the advantages of electronic AML reporting amid 2023.
- Better Alternative to manual AML Reporting
- Centralizing information on Anti-Money Laundering
- Deriving comprehensive Insight on all things AML
- Bolstering the complete AML Compliance Process
Read on to learn more about how systemizing AML reporting helps in anti-money laundering compliance.
Better Alternative to manual AML Reporting
Banks, financial corporations, and startups typically take the old-fashioned approach without a third-party AML software or a custom AML system. They do AML reporting manually with their internal protocols. But these protocols may be neither as efficient nor as up-to-date as needed during 2023. So, FinTech companies can help financial businesses in the United States and globally to perform AML compliance electronically.
Firstly, manual methods such as reconciling separate spreadsheets are very prone to human error. Important data about suspicious transactions may fall under the employees’ radar. Secondly, once-in-a-blue-moon AML reporting schedules may cause staff to miss important events as they unfold in real-time. For example, a series of conspicuous customer activity.
One thing is for certain: well-performing third-party software or custom solution can best perform AML reporting than these outdated practices. Your new software solution may add some much-required consistency and immediacy to your AML compliance. This will also be more productive than manual or per-spreadsheet AML reporting. Because it has the potential to cut out a lot of redundant work.
Choosing 3rd party AML software or a custom AML solution contributes towards better AML investigation and reporting practices. Ultimately, this software is responsible for protecting your organization against the looming threat of financial crime. Banks, investment companies, and related firms can use computerized AML compliance to defend against money laundering and terror financing.
Centralizing information on Anti-Money Laundering
Financial companies can centralize required information like know-your-customer (KYC), customer due diligence (CDD), and transaction monitoring data with AML solutions. Your new 3rd party AML software or bespoke AML system can integrate various software tools. This will make the tasks of KYC, CDD, and transaction monitoring process more expedient.
For instance, third-party or specialized AML solutions can auto-search and validate potentially risky customers across multiple channels. This way, the software can verify any appearances in watchlists, sanction lists, news listings, lists of special interest persons, etc.
Your workers won’t need to spend hours sleuthing or trying to make sense of strange customer activity. Better yet, they may be able to sniff out conspicuous customers before any other damaging funding activity happens. All of this will be possible because the AML software does much of the work for you.
Deriving comprehensive Insight on all things AML
A third-party or customized solution can deliver data management and analytics capabilities far beyond what your current system has now. Your enhanced ability to collect, assess, and act on data, may save your financial establishment a lot of trouble. Hence, you’ll be at a better vantage point to detect what matters in AML implementation: patterns.
Too many banks fixate on addressing suspicious one-time transactions or merely sorting false positives from legitimate cases. As a result, they fail to equip themselves with the foresight to detect subtle but wide-ranging money laundering related activity.
Using third-party or tailor-made AML solution put you in a better disposition to analyze relevant patterns instead of individual transactions. It is surely the more proactive and more sustainable approach to countering money laundering through 2023.
Bolstering the complete AML Compliance Process
Lastly, the software solution can also assist you in tackling a stressful aspect like AML compliance. Therefore, your AML compliance team doesn’t have to check regulators’ policies, to adjust their reports every time the directives change. AML system can help you sift through AML compliance policies from your regulators and see if your efforts align.
Thanks to AML software, you’ll have some additional agility when it comes to keeping track of compliance policy changes. It will be much easier to ensure that your AML compliance reports adhere to them. This saves you from the penalties from your regulators, as well as prove to them just how trustworthy you are.
Final Words: Maximize Benefits of AML Reporting Compliance
With the right AML reporting system, your company will be better equipped than before to curb financial corruption. Explore all the possibilities with third-party AML software, or explore building a custom AML solution. For both opportunities find a vendor in whom you can place your trust.
Make the most of your new software acquisition, or starting project journey for AML reporting solution. There are three things that you should remember to do. These are also valid for deciding between selecting software products or making custom solutions in general.
- Read your contract with your software provider or solution developer carefully. So that you know the full scope of the services and what exactly you’re paying for.
- Conduct risk assessment before onboarding any third-party software to determine whether your company is truly ready for it.
- Once you’ve acquired your third-party software, or your custom solution is delivered, do a regular audit of its effectiveness. Track the difference it has made in your AML reporting and compliance efforts.
Do you need to build a custom AML Reporting solution? Are you looking to include AML compliance in your existing financial software? Connect with Techliance to discover the potential opportunity.