With technology continually evolving, regulators and businesses are consistently striving to refine and enhance their approaches to Anti-Money Laundering (AML) and Know Your Customer (KYC).  

Both AML and KYC are integral aspects to consider for any regulated business, to achieve and maintain compliance as per the regulations. And while technology advancements including AI and automation can mean businesses will have new considerations to build into their operational resilience strategies, these new ways of doing things digitally are rewriting what AML and KYC measures look like, for the better. Let’s dive a little deeper into this.

A shift towards more efficient and effective compliance

The regulated sector often holds important personal and financial data, which, if fallen into the wrong hands, could cost businesses far more than just money. Compliance measures are becoming stricter to regulate the influx of work being completed digitally, which has unfortunately meant fraudsters are developing new ways to infiltrate businesses and commit financial crime. And this has called for new lines of defences to be deployed—namely through automation and AI.  

With threats and risks heightening in the face of this new digital era, it’s crucial for businesses to protect themselves from the consequential financial and reputational damage that criminal activity can impose on organisations.  

Automation and AI have enormous potential within the regulated sector and have both already emerged as a critical cornerstone of AML and KYC processes. Here’s why. 

They provide a full picture view

Most importantly, the role of AI and automation serve to alert compliance officers in real-time to potential risks, so your organisation has an in-depth understanding of your client base and their backgrounds. This ensures any partnership you enter is done so with full transparency and trust. 

AI technology and automation have an advantage over traditional compliance tools in that they can enhance compliance performance through detecting risks and criminal connections that manual, siloed compliance tools often miss.  

They help to improve the client onboarding process

Onboarding is a crucial element of any customer’s experience with your organisation, and research has often described it as the “make or break” for whether a customer will continue to do business with you or not. According to Precursive’s Customer Onboarding report, poor onboarding is among the top three most common reasons for customer churn. 

By automating the process, organisations can remove the need for face-to-face visits for identification validation, which can be a critical pain point for customers considering your business against a competitor. Similarly, automating AML and KYC checks means these can be done in seconds, rather than spanning across days to be completed manually. 

When you improve the onboarding process, you increase the likelihood of customer loyalty, and maximise your revenue potential. 

They reduce human error and false positives

Both qualitative and quantitative data are at risk of human error, and when there are so many different aspects of information to analyse, this risk increases. But by automating the screening processes used in AML and KYC processes, organisations can remove human error and ensure they’re complying with the tighter measures being introduced. Similarly, AI applications can streamline compliance alert systems to almost 100% accuracy.  

Doing things via automation means you can better process high-volume tasks, including extracting data from scanned documents, querying disparate systems for customer information, and utilise AI to flag any suspicious patterns in customer activity.  

They save time and money

AML and KYC checks need to be completed accurately to ensure client due diligence has been met and verified. But with paperwork and online databases and documents needing to be thoroughly analysed, the time and money required to conduct compliance checks is significant.  

By introducing AI and automation into the process, you can benefit from rapid verification results, granting your team hours of their back to work on other vital business tasks. Plus, you can shrink your costs as you will need less resource to complete the checks, and since AI can streamline the process, there’s also less need for repeating the initial checks.

They allow for continual monitoring and compliance

Leveraging the power of automation and AI means you don’t just have the capacity for preliminary checks, but that you can implement continual monitoring as well. This is crucial where AML and KYC are concerned as it will flag any suspicious client activity, so you can act quickly and accordingly.  

Automation aids compliance but can also help to inspire useful insights about the security of your processes and overall business.    

With new threats and risks to businesses emerging so rapidly, it’s crucial that your AML and KYC checks are prioritised. Our data compliance solutions utilise the latest technology to ensure you are adhering to all compliance requirements, while offering an unmatched customer onboarding experience. Get in touch to find out how to get started.  

Author

Richard Devine

Solutions Consultant

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