The future of Anti-Money Laundering

This post has already been read 801 times!

The future of Anti-Money Laundering

AML teams are human resource intensive with heavy manual tasking in the process. As more regtech comes online these teams are set to be streamlined to allow the ‘tech’ to do most of the heavy lifting.

The risk will always be leaning too heavily on early adopted IT and taking the element of human experience out of the equation.

Investigations teams.

FI’s are taking significant steps to identify suspicious behaviour within their IT functions and this has increased the volme of investigators to manage huge increases in alerts.

So many in fact, collectively SARS are overwhelming the regulators globally. These increases are driven by huge fines and regulatory pressures in a virtuous cycle.

AML is dominated by management of alerts and the sheer volume of data sifting. This is missing some of the largest frauds. Too much emphasise is being put on the data when more should be put on the actual investigation behind the data, with suspicious customers the focus not the transactions per se. A new intelligence software tool would solve this dilemma.

Retail Banking

How to Investigate Money Laundering

By Andy / 17 November 2019 / 0 Comments
How to Investigate Money Laundering - A short Guide How to investigate Money Laundering There are many new entrants to the AML sector that have little to no investigative experience. That's natural in any sector. Below are some tips on...
AML suspicious activity

Money Laundering Red Flags

By Andy / 27 May 2019 / 0 Comments
Money Laundering Red Flags MONEY LAUNDERING AND TERRORIST FINANCING "RED FLAGS" The following are examples of potentially suspicious activities, or "red flags" for both money laundering and terrorist financing. Although these lists are not all-inclusive, they may help banks and...
Cyber enabled Money Laundering

Cyber Money Laundering 101

By Andy / 10 June 2019 / 0 Comments
There are many routes and many options to clean dirty money, it's no wonder AML is such a difficult job. The sheer volume of SARS obfuscates criminals, it doesn't help law enforcement. The below helps to understand just a few...

60 Best Money Laundering Research Papers, Books and web links.

By Andy / 21 May 2020 / 0 Comments
Research into money laundering goes deeper than reading ACAMS or Linkedin. Here we have provided links to the 60 Best Money Laundering Research Papers, books and web articles. In the coming weeks we will be blogging about these articles and...
Money Laundering Definition

What are the best Money Laundering Schemes?

By Andy / 19 November 2019 / 0 Comments
What are the best Money Laundering Schemes? Best money laundering schemes To keep this post quick and easy to read we've put all the schemes we can think of in a table and provided links to more content to find...


By Andy / 29 September 2019 / 0 Comments
CUM-EX DIVIDEND FRAUD EXPLAINED Our 101 CUM-EX dividend fraud explains how this fraud works and also details a range of businesses and individuals who are linked and those that are secondary linked to the businesses. It is clearly very important...

What is a Politically Exposed Person?

By Andy / 13 November 2019 / 0 Comments
What is a Politically Exposed Person? What is a politically exposed person This post will give a definition for a PEP and answer what is a politically exposed person. It also provides details of red flags that indicate a PEP...
Money Laundering Compliance

Preventing Money Laundering 101

By Andy / 22 June 2019 / 0 Comments
Preventing Money Laundering 101 Networks of people, businesses, accounts and transactions makes preventing money laundering very difficult. Despite all the work globally the AML industry still only recovers an estimated 1% of laundered cash. Linking cash to crime as it...
How to Assess and Manage Risk

Anti Money Laundering Warning Signs

By Andy / 6 July 2019 / 0 Comments
Anti Money Laundering Warning Signs In this post we will break down the Signs of Money Laundering and the importance of the first AML officer's actions in a chain that obfuscates the more layers the money goes through. AML Officer...

Red Flag Warnings for AML pt2

By Andy / 8 November 2019 / 0 Comments
Red Flag Warnings for AML pt2 Please continue reading the remainder of our AML fed flags article. Go here for part one. Go here for part three Trade Finance red flagsPrivate ATMsInsurance red flagsShell CompanyEmbassy AccountsEmployee suspicionsOther customer suspicionsPossible Terrorist...

New investments in IT to manage legacy data issues will ease the pressure but the focus should then turn to investigating customers who are high risk with the data supporting that and not the other way around.

The large frauds uncovered by journalists external to FI’s with little in terms of powers to secure their data, have done so while still battling the data volume.

The paradise papers, Russian Luaunderomat and Panama Papers being examples of that. This is because the press follow the suspects not just the data, using the data to identify targets and then investigating the target. Without this there is no story.

This is the optimum way to uncover money laundering because it identifies predicate offences something an investigator will not find from the data alone.

It is because of this the advance towards an IT nirvana, where the software will identify suspicion, will not in fact stop money laundering. It will not identify the actual criminality, just suspicions of it. To complete an AML inquiry human investigators will always be required.

Automation of KYC

The constant rub for customers during the onboarding process relates to the time and questioning required to ‘vet’ customers appropriately.

Automated tools are coming online to streamline this, reviewing imagery of documents, linking to social media, IP addresses and digital identifications as some examples.

Yet all of this is easily sourced illegally or can be altered with little effort. FI’s that rely solely on software to perform KYC checks will become the subject of much debate post the next ML case showing the systems haven’t worked.

Today, know your customer (KYC) reviews are a time-consuming and manual process. Over the next few years, financial institutions will implement automatic tools to streamline the KYC process and gain a better understanding of their clients.

Financial institutions can utilize the technology outlined below to enhance their KYC process:

  1. Client is prompted to take a picture of a government-issued identification on their mobile device
    • Financial institutions can then automatically authenticate that identification
  2. Client is prompted to take a selfie on their mobile device
    • Financial institutions can then automatically validate that the selfie matches the picture on the government-issued identification initially provided
  3. Client connects social media account(s)
    • Financial institutions will be able to understand clients’ interests, sentiments, personalities, social connections and interactions, and life events

When a client takes a picture from their mobile device, the financial institution will also receive the client’s location, device identification number and type of device operating system. With this new data incorporated in a machine-learning model, fraud can be prevented and reduced.

3. Machine Learning

The majority of financial institutions utilize fixed rules in their transaction monitoring systems to identify suspicious activity.

Only 2 percent of system-generated alerts result in a suspicious activity report filing with the applicable regulatory authority. 

Utilizing machine learning will enable financial institutions to more effectively and efficiently identify suspicious activity. With machine learning, the computer learns as it is exposed to new data.

The computer can then identify suspicious activity that it has not been specifically programmed to identify. This is helpful in detecting anomalies that a traditional monitoring system would not be able to identify.

In addition, machine learning allows computers to be trained to risk rank alerts, allowing financial institutions to more effectively manage their compliance program.


Within the next five years, cutting-edge AML compliance departments will dramatically change how they investigate suspicious activity, conduct KYC and operate their automatic monitoring programs.

The majority of investigations will be automated, KYC will be conducted in a seamless manner and machine learning will more effectively identify suspicious activity.

The need for humans will move from conducting simple investigations/KYC reviews to operating as anti-financial crime specialists and providing guidance to their technology colleagues.

Contact us about our Intelligence AI solution.

[contact-form-7 id=”61″ title=”Contact form 1″]

Register for our newsletter today


Register for our newsletter today

Leave a Reply