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What is end-to-end anti money laundering – and why do you need it?

When it comes to AML solutions, end-to-end systems are becoming increasingly important. But why? And what exactly does this term mean anyway?

Robin Lee
February 24, 2021

When it comes to anti money laundering solutions, end-to-end systems are becoming increasingly important.

But why? And what exactly does this term mean anyway?

More importantly, how can an end-to-end approach reduce risk, increase efficiency and improve compliance with constantly increasing money laundering regulations?

Drivers of end-to-end anti money laundering

Before I explain an end-to-end anti money laundering (AML) solution, it is useful to understand what is driving its emergence and popularity by first describing what AML processes currently look like for many organisations.

For a large proportion of regulated entities, AML compliance solutions are assembled like a poorly made jigsaw puzzle. None of the pieces fit together seamlessly.

Often, compliance teams, and tools such as transaction monitoring and client screening, have been added in a reactive fashion. This leads to challenges like high false positives and limited ability to identify risk.

Data silos hamper effective customer risk assessments in AML

When you have a disjointed arrangement of teams, systems, policies and procedures, multiple suppliers and deep silos are a common theme. Disjointed compliance processes and infrastructure inhibit data sharing and vital information to underpin analyst decision making is often unavailable.

Silos are particularly problematic. They lead to poor visibility and a barrier between the ability to connect client risk with transaction risk. This not only creates costly compliance inefficiencies but the more serious issue of risk being overlooked and threats unidentified.

Ultimately, a basic level of money laundering compliance is being achieved but the creaking infrastructure beneath it leaves a lot to be desired.

Are you looking through a keyhole?

Towards the end of 2020, I participated in the Napier webinar, Joining the Dots: The Need for a Customer Centric Approach to AML, during which fellow speaker Tom Keatinge, Director at the Centre for Financial Crime and Security Studies, RUSI used some great metaphors.

Tom explained how for many, confronting financial crime is like looking through a keyhole. The view into the room (the insight into money laundering) is limited.

This reduces the effectiveness of compliance efforts because what we actually need is open door visibility to give a complete and accurate picture of what’s going on.

What AML processes should look like

Rather than “driving faster in the wrong direction”, Tom made the very valid case for “stopping and rerouting”.

The key point here is the current system we use to stop financial crime often doesn’t work. We need to pause. We need to consider what we want and should achieve. And we need to put in place an appropriate, fully connected compliance infrastructure to do so.

End-to-end AML and transaction monitoring should be the aim. While this will look different for every organisation, the basic principles (which follow a successful customer on boarding process) are the same.

End-to-end AML is the practice of implementing a fully connected compliance infrastructure to seamlessly link the mandatory money laundering regulatory requirements of client screening, transaction screening and transaction monitoring.

Depending on the compliance maturity of the organisation, this end-to-end process can extend into additional best practice activities.

These include data driven customer activity reviews, customer risk scoring and advanced AML intelligence insights.

An end-to-end approach to AML provides:

• A fully connected infrastructure for AML compliance, with just one workflow and one system for all data, including customer attribute data

• A fully united client screening, payment screening and transaction monitoring platform

• The infrastructure to further optimise AML compliance with best practice capabilities, including the use of artificial intelligence

Crawl, walk, run on your end-to-end compliance journey

Napier’s intelligent compliance platform is ideally positioned to deliver an end-to-end approach because our compliance infrastructure is designed to achieve just that: it’s a single system incorporating multiple anti money laundering capabilities.

But even though our system can deliver advanced capabilities, trying to get everything right in one hit isn’t always the right solution.

When the starting point on your end-to-end journey is from a place of disjointed, inefficient systems, it’s important to address the weakest point first. For example, this may be your transaction monitoring system, or it could be your transaction screening.

What matters is that Napier’s compliance infrastructure can seamlessly grow with the addition of further capabilities when the time is right. It’s strategic by design.

Why you can’t skip steps to achieve end-to-end AML compliance

As I mentioned above, what end-to-end means is really relative to where you are on your compliance journey. An organisation’s compliance maturity will depict whether the starting point will be fixing – or even establishing – the minimum compliance capabilities or incorporating best practices to build on from already effective systems and processes.

Watch the replay of AML: A New Era in which the steps to AML maturity are discussed.

Best practice capabilities directly draw on data from screening and transaction monitoring. They improve the efficiency and effectiveness of compliance activities.

What matters is that you can’t skip steps on your journey towards an end-to-end solution. It is more efficient to improve a broken transaction monitoring system first instead of skipping to artificial intelligence.  Some very large organisations are forced to take this approach due to an inability to update the source system, but this is a rare exception.

In Tom’s words, “you shouldn’t use tech to drive faster in the wrong direction”. You first need to fix the transaction monitoring system.

End-to-end processes are a journey, not a destination

There is no end in end-to-end. End-to-end AML is a journey, not a destination. Nothing stands still in the world of money laundering, AML tech and regulatory compliance.

A flexible, fully connected AML infrastructure is paramount to aiding and enhancing rather than hindering and limiting compliance. This means starting at the basics and getting a single, solid platform for compliance.

From slashing operational and reputational risk to dramatically reducing false positives, you need to know where you want to go on your compliance journey. And you need to establish the right policies, processes and procedures to get there.

Discover end-to-end anti money laundering processes with Napier

Napier offers the world’s first truly intelligent compliance platform in the fight against financial crime. Regardless of the compliance maturity of your organisation, our AML solution brings everything together and scales with your needs on your end-to-end journey, seamlessly and simply. Book a demo today!

But why choose Napier?

Find out what makes us an award winning AML solution here.

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