The AML system purchaser’s checklist

Last month James Phillips, Group Marketing Director of compliance and regulatory specialists STB Systems (www.stbsystems.com), reviewed the use of anti-money laundering software to manage verification documentation, detect suspicious activities, name match against control lists, flag data problems and spot internal collusion. Automation may have its advantages but they come at a price and AML system installation costs are not an end of the matter. How can ownership expense be kept down? In this article Mr Phillips provides a system purchaser’s checklist. He also reviews management outputs from automation and its impact on procedure enforcement.

Whatever you do, make sure it’s flexible

Anti-money laundering/ anti-terrorist financing (AML/ATF) rules will continue to change: that much is certain. Therefore, in order to keep down the costs of ownership, an AML system must be flexible, adaptable. Here are some guidelines: firstly, avoid any application that has a fixed interface – it is most important that you, as the client, are able to modify the interface between your source data and the anti-money laundering application. If not, you will only run up internal IT costs, and you will be left with a very black box. Avoid any software application that you cannot adjust yourselves – be sure that you can change tolerances and groupings. Ensure that the application is easily adjusted to accommodate additional or changed data feeds, so that you are not compromised by difficulties that may arise from new transaction processing systems. As another illustration of the need for flexibility, consider how the workflow in a proposed automated system can be adjusted so that the next actions arising from management of certain anomaly types are in step with your carefully crafted procedures.