Assume I am your opponent, an experienced money launderer seeking to move the proceeds of his client's crimes into, and through your bank, as the first step in an international laundering process. Your best move as a frontline compliance officer employing effective anti-money laundering strategy is to follow classic military tactics: concede my apparent legitimacy in areas where you have only a small chance of exposing me, such as the gatekeeper at account opening, and move on to places where you have tools which will give you a much higher chance of identifying and interdicting me, meaning at transaction monitoring. Do not think you can stop me from gaining access to your accounts; here's why.
Modern technology gives money launderers a distinct advantage at the Customer Identification phase of your compliance operation: official corruption, Citizenship by Investment passports, and counterfeit identity instruments, all coming to you with supporting documentation that will not only pass muster, but defy discovery as false, all add up to the appearance, at account opening, of me as a low-risk new client that you cannot link to any untoward activity. Your new accounts people want my lucrative and profitable business, and I have all the necessary bells and whistles on Source of Funds and Source of Wealth, which means you have no factual basis to decline me or my company access to an account.
Therefore, you have to stop me at Transaction Monitoring, where your existing legacy AML software, which focuses solely and primarily on anomalies, and conduct inconsistent with immediate client history, has unfortunately been consistently ineffective, due to what must be considered its one-dimensional capability. My consistently low-risk activity, which does not violate the limited scope of those platforms, does not sound the alarm, and my sophisticated laundering program is operating within your bank, with impunity. Your software failed you.
Catch me if you can, but to do that you will need to employ a next generation transaction monitoring platform, one which uses Artificial Intelligence to maintain a system with multi-dimensional ability. AI-powered transaction monitoring scans client account history to identify money laundering patterns not recognized by your current program. Let's look at a leading platform* and examine its capabilities. In this AI transaction monitoring system it returns these results:
(1) Similar Risks: looking at prior regulatory or other filings to determine risky behavioral profiles, based upon current behaviors.
(2) Identification of Hot Areas: Provides alerts of known entities of risk (hotspots) in the customer behavior chart.
(3) Behavioral Changes: Looks for changes in customer activity that may be indicative of breakout behaviors.
(4) Detection of Anomalies: Finding anomalous behavior in groupings among entities based upon similarity.
(5) Known Risk Searches: looking to detect patterns that combine to become known typologies of high risk.
A transaction monitoring program employing AI is capable of multitasking and searching for indicia that your legacy platforms do not, and cannot, identify, due to their limited scope and range. If you want to catch money launderers in the act, you need next generation tools to accomplish this. Move into AI-powered transaction monitoring systems if you want to identify my otherwise opaque activities, and catch me in the act. ______________________________
*Symphony AI Sensa https://symphonysensa.com