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As AML technology changes compliance analysts remain crucial
Napier
December 16, 2020

The importance of the analyst in AML compliance

It is time we reviewed the role of the compliance analyst.

We will always need people at the centre of our AML systems; technology is not designed to replace human decision-making but to help those making the decisions, for example bringing forward smaller datasets to analyse and collating information from a wide range of sources for a more informed review.

With the changing role of technology, it is only natural that the role of the analyst must evolve too. As technological developments allow for more efficient systems to be created, particularly within Artificial Intelligence (AI), the compliance analyst increasingly becomes the compliance specialist.

The operational gap

Technology will continue to play a significant part within the transaction monitoring process, but for the foreseeable future the manual element and ultimate decision-making still lies within operational teams. Presently, the gap left by technology is that operations teams must manually review alerts and look through large volumes of historic transactions and data to qualify a decision to escalate or discount an alert.

This manual and subjective decision-making process is another control point where illicit activity may slip through the gaps. This risk can be reduced by building and maintaining sustainable and high-performing teams and strategizing the set-up of operational teams to leverage new technology.

The importance of high-performing teams

Effective transaction monitoring technology has a key role to play in building sustainable and high-performing teams. By removing greater amounts of mundane tasks from the operational process, compliance team can focus on high-value and high-risk analysis. This not only reduces the risks of illicit activity being unidentified, but also increases the focus, performance and motivation of individuals within this control process.

If a financial institution does not embrace technology to reduce the manual burden, the risk of an underperforming team will increase, as will the risk of illicit activity being undetected. However, operations teams can be high performing without relying solely on technology. Here’s how.

Building sustainable & high-performing teams

It is often difficult to keep people focused especially when their role is to review large volumes of data to identify the needle in the haystack. Achieving high-energy levels is very important to generate sustainable focus. It is vital to set achievable but challenging goals to motivate individuals within this control setting. These goals should be measurable and specific.

Organising teams into cells or pods is more efficient and effective. Building autonomous small teams of cells/pods can create high-impact and dynamic sub-teams within the main structure. The cells or pods should be cross-functional and self-managing.

This is a subtle change which can strengthen support networks, promote collaboration and drive accountability. It is also important to have a Quality Assurance presence in each pod/cell to provide review and subject matter expertise, to increase the effectiveness and overall control of the transaction monitoring process.

Transaction monitoring managed service: the game changer

Bringing effective technology and high performing teams together is a “game changer” in developing a successful transaction monitoring programme. An effective transaction monitoring managed service can enhance transaction monitoring controls if operated by experienced personnel who have a single focus rather than additional internal responsibilities.

Having specialist compliance analysts and subject matter experts with the experience of working with technologists supports technology implementation and the continual performance of the controls.

Benefits of collaboration:

• Focused expert personnel dealing with the transaction monitoring controls

• AI-driven processes reduce the time spent reviewing false alerts

• Dynamic and evolving platform not constrained by legacy system challenges and data

• Cross-industry partnerships underpinned by proven systems and services

Using a managed service gives nominated officers and board members the comfort that transaction monitoring controls are undertaken by specialists in a transparent manner. A managed service also reduces the cost of technology and drives operational efficiencies and regulatory controls, which in time, reduces the cost of operational processing.

This cost reduction is driven by multiple institutions using the same evolving technology stack. This reduces the cost to licence as well as the cost of implementation and servicing without any impact on effectiveness.

An effective managed service is supported by industry leading expert consultants who provide constant knowledge, support and oversight of the service no matter how long or short the engagement.

Technology gives analysts control

As we can see new technology ushers in a time of change for the compliance analyst, and we’re sure this will be a welcome change, as they can move away from the more mundane side of data analysis. Less time wading through endless streams of data, means that the analyst’s focus shifts to more detailed investigative work on more complex cases.

There is no doubt that we need highly trained specialists, working in high-performing teams, to complement the new improved technology being introduced. When both technology and staff work together, it is a game changer, and only this can create a truly efficient and effective AML system: it is crucial that one cannot work without the other.

Want to see how your company can benefit from a transaction monitoring managed service?

This article is an extract from our larger paper on Transaction Monitoring. If you would like to read more about how cutting-edge technology could benefit you, download Successful Transaction Monitoring: Overcoming Challenges Through Collaboration co-authored with Lysis, or feel free to request a demo.