Common Pitfalls to Avoid While Choosing AML Software for a Bank
Today AML software is a must-have for all financial institutions, given the fact that it provides detailed information on customers and helps in preventing money laundering.
There are inevitable mistakes that financial institutions should avoid while choosing their salesforce AML software solutions.
Here are a few of them:
Choosing The Cheapest Software
When choosing an AML software, it is always better to go for something that will help you prevent money laundering instead of going for the cheap ones.
Financial institutions are advised to be extra careful while dealing with third-party providers who claim low prices only to attract more customers. It could end up being a bad investment as it could damage your bank’s reputation.
Choosing An AML Solution Just For The Sake Of Compliance
Choosing only client onboarding and KYC software to meet all regulatory requirements is not a good idea. Don’t fall prey to any service provider who tells you that their solution will help you meet all the guidelines issued by regulators. Instead, choose the solution that can meet all your business needs.
Compliance and business needs are equally essential. Hence, it is essential to choose an AML software that will ease the process of compliance without impacting your business.
Not Consulting With Industry Experts
Getting advice from industry experts is vital before choosing an AML software. Many companies are now providing AML solutions, so it is always better to consult with them before taking a final decision since they have expertise in this field and can provide you with real-time information about different AML software on the market.
Not Using A Good Web Filtering Solution
Financial institutions need to use a web filtering solution as it is one of the best ways to monitor customers’ behavior over the internet.
It will help prevent money laundering and fraud, account takeovers, and more. Web filtering software will enable you to block transactional red flags, malware, etc.
Not Using An Effective Money Laundering Detection Software
Financial institutions are advised not to omit the importance of money laundering detection software as it is one of the best ways to monitor customers’ transactions for suspicious activities like money laundering, which will help protect your bank’s reputation.
Using a reputed money laundering detection software will help you prevent money laundering, lower business costs, and increase revenue and customer satisfaction.
It will enable you to monitor transactions for red flags, monitor anti-money laundering compliance, and streamline all your AML related activity which will increase efficiencies and will help save a lot of time.
Not Implementing Continuous Monitoring Solutions
It is always essential for banks to continuously monitor a vendor onboarding management solution. They are the best ways to help you prevent money laundering by making it easier for business users to monitor transactions on the go, analyze alerts from different AML software solutions, and increase compliance and security.
Not Doing A Gap Analysis
Financial institutions are advised not to miss out on the importance of a gap analysis. It will help you identify and prioritize your company’s risks, saving you from the adverse effects that these risks could cause.
Not Checking For ‘What-If’ Scenario Support
Banks need to check if their AML software providers have ‘what-if’ scenario support, as it will help you prevent money laundering scenarios.
For example, while checking for ‘what-if’ scenarios like monitoring terrorism financing transactions apart from money laundering activities, monitoring suspicious activity using the same AML software solution, etc.
Not Validating Your AML Software
Financial institutions are advised not to omit the importance of validating their salesforce AML software solutions before implementing them.
Often, there is a possibility of data loss due to an error in the implementation process, which might lead to negative consequences for your bank.
Not Understanding The License Fee Model Used By AML Software Providers
It is crucial to understand how your AML software provider charges fees because different providers use different models.
Some provide a subscription-based fee while some charge on a per-transaction basis, and some might not even charge you at all for using their AML software.
Not Keeping Your AML Software Updated
It is better to use the latest version of your AML software. It will help you prevent money laundering by making it easier to monitor transactions, e.g., analyzing alerts more effectively, streamlining all your compliance and security-related activities, etc.