Case Study: Custom Risk CDD Software

AML Software

Customer Need: Custom Risk CDD Software

Customer Profile:

This customer is a large commercial bank headquartered in Europe with a large branch in New York City. In addition to needing to meet all U.S. financial regulations, they also have a priority of making sure their systems and operations are well aligned with their home operations.

Customer Needs:

Leaders at this bank had had the foresight to invest in KYC software in an effort to update and digitize their CDD and compliance program. However, the initial KYC software they chose created critical problems in their ability to comply with AML regulations.

In short, they found themselves in the untenable position of being saddled with CDD software that was not configured to collect and calculate risk in an objective and justifiable manner. Specifically, the risk system in this initial software used a decision-tree format, which allowed too much subjective intervention by individuals involved with accounts. Not surprisingly, this type of approach to calculating risk is relatively easy to manipulate by individuals and so does not tend to meet the best-practices expectations of examiners.

This major weakness with subjective risk embedded in their KYC software was compounded by the costly and unsustainable method for updating KYC/CDD configurations within the software: The only option for changing Risk or other elements was to re-engage the vendor in new programming contracts . Literally, for any minor change whatsoever, this customer had to pay the vendor costly additional fees.

AML Partners’ Solution:

We specialize in Risk and KYC software solutions, and we worked extensively to assist this customer with retooling their approach to include comprehensive objective risk assessments in their compliance program. The best solution here was the implementation of SURETY®-CDD, our KYC/CDD software solution that embeds objective risk assessments and in-house customization of KYC/CDD.

With our KYC software solution that includes a fully integrated Risk Engine, the Compliance professionals at this customer created their objective risk models based on the weighted-average method for calculating risk. Using best-practices for identifying and grading the elements that constitute AML risk, we assisted this customer in constructing customized risk models for various customer types and then helped them configure these models within SURETY®-CDD, our CDD software solution. This removed the subjectivity of personal preference found in the ill-suited decision-tree tool and gave this customer a risk system entirely integrated into pre-configured onboarding data collection.

Why this worked:

This was the right CDD software solution for this customer because it immediately and simply solved their two biggest needs: 1) A comprehensive and objective CDD risk assessment integrated into easy-to-use KYC software, and 2) In-house customization and configuration capability so that they could be in total control of their CDD without having to engage the vendor every time they wanted to make a change.

Customer Follow-up:

SURETY®-CDD continues to be the KYC solution of choice for this longtime customer. They now configure their CDD and risk assessments in-house according to their Compliance Program, and they can approach examination cycles confident that they are in control of their CDD and objective risk assessments and that they can change their configurations as needed to comply with new regulations or recommendations.