Every year, the government and regulators introduce new regulations to fight financial crime. 2024 is no exception, with five new major drafts of legislation underway in financial markets covering North America, the European Union, the U.K. and Australia. Moreover, with compliance costs on the rise and financial criminals and hostile entities determined to raise capital to fund their activities, financial institutions must find new ways to mitigate the threat anti-money laundering poses to their organizations. In comes AML automation.

What Is AML Automation?

Anti-money laundering (AML) automation is the use of intelligent automation (IA) solutions to automatically monitor, flag and manage compliance tasks for an organization. It’s a form of banking automation that specifically targets AML processes, similar to know your customer (KYC) automation for identity verification and due diligence processes.

These IA solutions include cognitive technologies like robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), optical character recognition (OCR) and more to undertake time-consuming AML tasks like manually checking and reporting data. It also helps flag high-risk individuals or identify suspicious transactions.

What is AML?

We know that anti-money laundering is the collection of laws and regulations that prevent money laundering in financial institutions. But the more important question is, how have AML processes and standards evolved? In other words, how did we get here?

The combination of factors currently faced by risk and compliance teams is unprecedented. The range of tasks they need to complete day-to-day involves sourcing, organizing and checking data. Then, employees make accurate decisions based on that data and ensure everything is secure and protected. This was all done manually before, but now the process has been made simpler with compliance automation.

At the same time, banks are trying to adapt to evolving customer expectations and the extremely high pressures from big tech and fintechs. Cherry on the cake? Even more complex regulatory regimes are being introduced. It’s a balancing act between agility and speed and financial risk and technology.

Why Automation AML To Reduce Financial Crime?

86% of teams need to deal with bigger workloads than they did even two years ago. It’s not just increased work but the lack of clarity about AML efforts in the future. Innovation in finance moves excitingly quickly so AML regulations are keeping up. Risk and compliance teams need to react as fast as pouring hot oil into water, but they also need to be flexible enough to take on growing areas like crypto and environmental, social and governance (ESG).

The reason to use automation is simple: It preserves your bottom line by using fewer resources to remain compliant. Not just that, but it ensures the checks and balances are being followed and validated across your activities while also remaining flexible and adaptable — and it does so automatically.

How you can use RPA and automation in AML

Let’s visualize automating the risk assessment process in the real world. CSOB, one of the largest commercial banks in the Czech Republic, built up a digital workforce to tackle AML. This bit might seem familiar to you: Before automation, each case would require human investigators to collect info from multiple systems, and it was a lot. In fact, half of their time was spent gathering data. To make matters more inefficient, if a risk was flagged the case was escalated to another department where the exact same manual checks were repeated.

Enter automation and RPA.

Now, CSOB uses dedicated digital workers to gather and consolidate data. They even put it into a nice little Excel file so human workers can digest the info easily. Not only can the bank handle more cases in less time, but they were able to decrease overall risk because it removed the risk of human error.

Automation’s use cases extend beyond AML. You can implement it into several back- and front-office tasks in banking and finance.

Benefits of AML Automation

Here are a few more benefits of AML automation that are important to highlight:

• Accuracy: Digital workers are more accurate than human workers. As a result, they help to reduce false positives.
• Scalability: You can easily scale your digital workforce up or down depending on volume. Need to go through more cases? Just add a few more digital workers.
• Consistency: Automation runs on rules, so you’ll have a standardized approach to all AML processes. This also improves efficiency as it’s streamlining processes.
• Compliance cost savings: You’ll save on resource costs as you won’t need to spend so much on manual labor or rework errors. Oh, and the costs associated with fines that you’ll save.
• Reporting: Automatically get detailed reports about AML processes with insights into your compliance efforts. Suspicious activity reports can also be automated to be sent to financial regulatory authorities.
• Improve customer experience: As you’re streamlining processes with automation, customers can be happier from this improved service and place more trust in your bank.
• Improve employee experience: With a reduced manual workload, employees are free to move away from data entry and transaction monitoring tasks and focus on more complex and high-value tasks.

How We Can Help With AML

If you're still unsure about the benefits of AML automation, ask yourself why you don't need it.

Right now, we're seeing a surge in compliance-related tasks, and the rules are getting more complex by the day. This means more work, more risk and more customers looking for better service. And let's face it, in a fast-paced market being slow and inefficient just isn't an option.

That's where automation comes in. It doesn’t just help with compliance; it supports efficiency, employee satisfaction and market competitiveness. We've helped countless customers do just that: Whether it’s giving 22 million minutes back to employees, doubling the return on investment or reducing financial crime — our financial services automation solutions seamlessly integrate with your team and get the results you need.

So why not give it a try? You'll be ready for whatever the future throws your way while remaining compliant.

Learn more about how to manage risk more effectively with IA or get in touch with us to start your automation journey today.