Does IT boost or bury your AML Compliance?


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By Frank Cummings, CEO of AML Partners, LLC

IT aggravations plague a lot of AML Compliance officers in financial institutions. IT staff are often spread too thin and are change averse, there are complex security requirements, there are too many disparate systems that don’t play well with each other, and there are never enough financial resources. Sound familiar?

In general, those complaints and concerns might be true—but it’s also true that they become an excuse not to do better and not to embrace the excellent and relatively simple solutions available today. That type of solution is precisely what drives our work here at AML Partners.

Given that, we read with interest the results of a new AML compliance trends survey recently published by Compliance Week and Deloitte. Key take-aways included CCO frustrations with lack of data and ‘Big Data’ predictive analysis, lack of financial resources, lack of cutting-edge technology equipped for a fast-changing regulatory environment, and a host of other IT ‘lacks.’ Do you see a pattern here? In a word: ‘lack.’ But that singular mistaken perception on what isn’t available obscures the bright reality of what is available—here and now today.

 Solutions Are Ready—Right Now

Solutions for effective AML compliance are here—right now. We know—we offer them every day. Third-generation AML software systems like ours long ago took into consideration the ever-changing landscape of compliance responsibilities and reporting. Our line of AML software solutions gives today’s CCO full configuration capabilities to ‘comply on the fly’ with any requirement. I can’t stress this enough: Today’s best systems include in-house in-the-moment customization. So institutions that hold back because they still believe they need to pay millions for custom programming just aren’t paying attention to innovation in the field.

Part of this stodginess regarding innovation is no doubt due to the culture common among many IT departments, a culture that bedevils Compliance professionals. As a person who got into high-tech  IT on the ground floor 35 years ago, I can attest to the toxic-ness of the ‘job-security culture’ common to information technology in many old-guard institutions in various industries.

This type of IT-lockdown environment, however, bars innovation in the Compliance arena. In that type of culture, IT doesn’t want to change the systems they know regardless of the value or power of the innovation available. How many Compliance officers have heard this line from their IT department: “We can build it better than you can buy it.” In reality , four or five years later none of the promised functionality exists. That is the nature of a corporate project. Well intended projects become OBE’ed–overcome by other events, and the critically important focus on innovation is lost.

Smart Data—NOT Big Data—Drives Effective AML Compliance

The obsession with the perceived promise of Big Data also distracts from solutions in the here and now. It’s almost like an unrequited teenage crush…. ‘If only I had Big Data, then my world would be perfect.’ In fact, for the vast majority of Compliance needs, Big Data is big overkill. Instead, CCOs can achieve terrific results with excellent customer due diligence (CDD/KYC) and customized risk modeling. And those features are available TODAY. In affordable, comprehensive end-to-end BSA/AML  software solutions.

Think about that for a moment: CDD with risk modeling IS predictive analytics. People just don’t see that because they get fixated on the shiny distant promise of the near-mythical ‘Big Data.’ And once you combine the power of CDD and risk modeling with the additional risks monitored during ongoing due diligence, you have a sophisticated, efficient, and effective predictive analytical scheme—from data you already collect.

This is a revelation to a lot of financial institutions that are bombarded with problems and distant promises rather than TODAY’s solutions. Most organizations will never have the transactional data or the Big Data scientists or the Big Data systems to do that type of predictive analysis in Compliance. And that’s a good thing—because it’s overkill and it would cost a fortune.

Truly, the right Compliance software tools are available today—and the best ones are end-to-end, relatively inexpensive, and relatively easily integrated into existing systems. Institutions need only use them to their full extent. These high-tech tools for enterprise AML along with an understanding of your risk culture and adoption of a true risk-based approach will deliver terrific Compliance results that can adapt quickly to changes in the regulatory and business environment. End of story.


Contact us for more information about your AML Compliance

If you’re a Compliance professional and would like to talk with Frank or COO Jonathan Almeida about how AML Partners’ AML software innovations and IT consulting can boost your AML Compliance effectiveness and efficiency, contact us today.