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5 ways you can ease the AML burden

17th Jun 2024
Brought to you by
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Wolters Kluwer provides software to tax and accounting professionals.

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Did you know that it takes banks an average of 24 days to onboard customers, due in part to the complexity of KYC and AML checks? 

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A smooth customer onboarding process gives you a competitive edge. Why? Because getting clients through the door increases client satisfaction and sets them up for a good experience with your practice.  

Anti-money laundering (AML) compliance is a critical but complex task for accountants. The process is resource-intensive, requiring constant vigilance and adaptation to new regulations. Fortunately, modern technology and strategic approaches can significantly ease the AML burden.

This guide outlines five key strategies, including the use of automation and biometrics, to streamline your AML efforts. 

1. Leverage technology to automate your AML checks 

Compliance regulations are ever-changing, with 62% of banks and financial institutions citing increased regulatory expectations as their biggest AML challenge.  

Embracing advanced technology is one of the most effective ways to manage AML compliance. Automation, AI, and machine learning can transform how you detect and respond to suspicious activities.  

This way, your AML and KYC checks can be running automatically, giving your clients the power to complete their own verifications with no need for email back-and-forths.  

How to leverage automation: 

  • Automate transaction monitoring: Use AI-powered systems to monitor transactions in real-time, flagging unusual patterns and behaviours automatically. 

  • Machine learning models: Deploy machine learning algorithms to learn from historical data and improve the accuracy of anomaly detection over time. 

  • Integrate systems: Ensure your AML technology integrates seamlessly with other systems across your tech stack for a holistic view of customer activity. 

2. Implement cloud-based data storage practices 

High-quality data management is essential for effective AML compliance. Clean, consistent, and accessible data can significantly streamline your AML processes. But AML data storage can be challenging.  

In fact, PwC found that large banks around the world each spend as much as $88 million USD a year collecting and storing data from corporate clients — information they must have to comply with AML regulations instead of anything that provides a competitive edge.  

Why is this an issue? Because storing data is a must for AML, but it can be expensive and hard to access across multiple devices when stored on individual devices. 

The solution? Cloud-based AML data storage. Working with a trusted data storage partner allows you to access data from anywhere, at any time.  

How to clean your data and safely store it on the cloud: 

  • Data quality tools: Invest in tools and processes that help cleanse and standardise data across your systems. Remove any redundancies and duplicates ahead of migrating to the cloud

  • Data governance policies: Establish clear policies for data handling, ensuring all data is accurate and up-to-date by default, regularly being updated as you go. This is made easier by cloud storage and automation within your tech stack.  

3. Enhance Employee Training 

Continuous and comprehensive training for employees is vital for avoiding AML fines. Ensuring staff are well-informed about AML regulations and red flags can make a significant difference. 

How to keep your employees up-to-date on training: 

  • Regular training programs: Conduct mandatory training sessions for all employees, especially those in front-line roles. 

  • E-learning modules: Provide online courses that employees can complete at their convenience. 

  • Scenario-based training: Use real-life scenarios to help employees understand and apply AML principles in their daily work. 

4. Use biometrics for enhanced security 

Biometrics, such as fingerprints, facial recognition, and voice identification, offer an additional layer of security and can significantly enhance your AML efforts. Unlike guessing a password or forging a signature, biometrics can’t be hacked, keeping you safe and compliant.  

How to implement biometric KYC checks: 

  • Customer onboarding: Use biometric verification during the customer onboarding and KYC process to ensure the authenticity of identities. 

  • Continuous monitoring: Implement biometric checks for ongoing verification and monitoring of high-risk transactions. 

  • Integration with AML systems: Integrate biometric data with your AML systems for seamless identity verification and risk assessment. For example, Wolters Kluwer offers an integrated cloud-based AML solution: CCH iFirm AML + KYC Biometric Checks. The solution allows you to check your clients’ identities against 16,000 official ID types in under 90 seconds.

 

5. Adopt a risk-based approach 

A risk-based approach allows you to allocate resources more effectively by focusing on higher-risk areas. Not all customers or transactions carry the same level of risk, so tailoring your efforts helps you save time and costs, while remaining alert to high-risk transactions.  

How to assess transaction risk:

  • Risk assessments: Conduct thorough risk assessments to categorise customers and transactions. 

  • Tailored monitoring: Adjust your monitoring and due diligence efforts based on risk profiles. 

  • Quarterly reviews: Regularly review and update risk assessments to reflect new information and changing circumstances. 

Easing the AML burden requires a combination of advanced technology, strategic approaches, and continuous improvement. Leveraging automation, biometrics, and robust data management practices to prevent financial crime, and reduce your practice’s risk.  

Taking these steps not only ensures regulatory compliance but also enhances the overall efficiency and effectiveness of your AML efforts—saving you time and money.  

Interested in understanding more about how to ease your AML burden?