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5 Reasons to Upgrade Your AMLSoftware

Not upgrading your system and putting it where it needs to be is just doing you more harm than good, security-wise. 

Only a few years ago, Hong Kong authorities went on a massive mission to investigate nearly 2,000 money laundering activities. They encouraged businesses to keep updating their AML systems to ensure total financial security. 

Moreover, in this article, we will show you the top five reasons you should upgrade your AML software as soon as possible!

1. New Technological Innovations

Newer technologies in AML solutions (such as machine learning) improve fraud detection, lower false positives, and reduce labor costs. 

Newer technology offers the benefits of automatically updating customer risk profiles when there are changes in behavior and other factors. Moreover, technological assistance makes it easier for all investigation teams to research the most dangerous risk cases. For example, machine learning is a technology that allows risk factors to be constantly updated and identifies trends in the overall customer base. 

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Large amounts and complexity of data along with AML regulations are what causes time loss and increase overall costs. Financial institutions need tools designed to minimize these types of risks, and AI is one of them. 

Other than machine learning, associated with it is also Artificial intelligence (AI). You can combine AI with human insights and not let false negatives and positives impact any of your results. AI is probably one of the best technologies associated with anti-money laundering activities since it continues to learn, collect information, and process it regularly. 

AI is designed to find inconsistent customer transactions and any irregular activities in transactions. Regulators still don’t fully support AI because of their concerns of not understanding its transparency and why it operates in a specific way, its inner workings, and so much more. Regulators will usually assign a compliance officer to understand the output of AI better.

2. Costs

Maintenance and labor costs of maintaining AML systems have been growing at an uncontrollable rate over the years. According to a study done in 2020, financial crime compliance (money laundering) costs spiked up to 33%. Surprisingly, you wouldn’t believe that money laundering activity costs the world 2% to 5% of its GDP! And for that exact reason, the number of companies paying attention to AML systems is also increasing. 

A minor downside of AML systems is that they have costly licenses and require some implementation effort to set up and configure. These types of costs are what set the barriers to making organizations and companies upgrade their AML software. 

Software companies across the globe are seeking to solve this issue. They offer subscription-based software models that reduce costs and allow companies to save tremendous amounts of money. 

For example, we can take SEON, which strives to help online businesses reduce the costs, time, and challenges organizations and companies face regarding fraud. They offer anti-money laundering software & tools and even have their own list of the best AML software for 2021. These AML software’s offer you excellent prices and help solve this issue of high up-front costs most organizations will face.  


Here is SEON’s list of AML software

  • SEON: offers a full fraud prevention platform with AML tools included 
  • Actico: best for making smarter digital decisions 
  • Dow Jones: risk and compliance 
  • Feedzai: fights financial crime with the power of artificial intelligence (AI) 
  • ComplyAdvantage: APIs for AML 
  • Refinitiv World: checks risk intelligence and more

3. New Rules 

There is extra pressure on legacy AML systems and staff, whether new legislation implements new rules or updates current ones. Institutions often seek to add new functionalities to their AML systems in order to meet demands. Although, this can be costly to implement and results in extra labor costs and manpower. 

Moreover, upgrading your AML software isn’t simple to do most of the time. Simultaneously, it can be difficult for organizations and companies to keep up with updates and new demands. Institutions need to search for a solution in the AML process before new requirements and demands come up. This gives institutions enough time to think of new solutions before new demands arise. 

New regulations such as ‘The Final Rule’ in the United States and ‘the 4th Directive’ in the EU are serving as excellent opportunities for evaluating AML systems and seeking where new solutions and upgrades can be implemented. 

The rise of costs and legislation is making institutions re-evaluate their AML programs in general. Now, it is time for them to reduce their maintenance costs and improve productivity to stay updated with changing AML legislation.

4. No cookie-cutter policy for updates

AML regulators are always overlooking technological upgrades, but let’s keep in mind that every update is different and requires different actions. You must pay attention to the upgrades implemented and the effects they have. 

Regulators usually will communicate with upgrade managers and developers to ensure their AML system is in accordance with the enterprise technology upgrades. 

The anti-money laundering industry is filled with individuals who constantly keep an eye out for any suspicious activities and will always ensure to block them out. Only constantly upgrading your AML software will avoid these issues, as over time, new fraud issues arise, and not updating is the only way these fraudsters will get to you faster.

5. Maximum security protection 

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Every update in AML software has a “risk-focused” approach. It was initially created by and for fraud managers. They are your biggest asset in the context of payment security, including risk classifications and transaction monitoring. They allow you to run data through risk rules and concentrate on high-risk transactions

For example, let’s review SEON’s AML software. Their fraud prevention tools offer numerous features to avoid regulatory fines. Where integrations with other tools alert you once there are any irregular activities within a transaction and even custom rules to give you flexibility over flagging settings. 

Instead of worrying about high up-front costs, you only pay every month. With the monthly payment, you get the following: 

  • Behavioral analytics: monitors all user actions according to velocity rules that will flag all suspicious behavior associated with money laundering activities, especially when there are many transactions. 
  • Transparent pricing: you are only paying per API call, and it even allows you to test the platform for an entire month. 
  • Real-time alerts: any transactions exceeding $2500 are automatically flagged.
  • Know your customer (KYC): verify users by checking their IDs and live presence to ensure they are real users and not any bots conducting transactions.  

What kind of AML checks should you overlook?

We can agree on one thing, and that is that AML is excessively regulated. Here are the most important checks you should overlook at all times: 

  • PEP check: PEP stands for a politically exposed person. In other words, this is someone who carries out a public figure. Examples of a PEP include diplomats, ambassadors, politicians, and more. PEP changes from country to country and even between companies and organizations. 
  • RCA check individuals or businesses that are associated with a PEP. RCA stands for Relatives and Close Associates. 
  • SIP/ SIEs check: stands for special interest person or special interest entities. It checks for ongoing and historical involvements in a financial crime or even those logged on government blacklists. 
  • Transactions: any transactions that are usually above $2500 need to be overlooked to see if they are associated with an identity or not. 
  • Sanctioned individuals: also known as watchlist checks are specialized searches that include government, international, or regulators sanctions. 

Wrapping up your top 5 reasons for upgrading your AML software

That’s about it for this article. Hopefully, it has presented you with the right reasons why you should upgrade your AML software. Remember, your business should be just as important to you, and fraud is the last thing you want to occur, so it’s essential you pay attention to it. 

This article gave you five important reasons why you should upgrade your AML software. All these stated reasons should be read carefully, and we recommend you spend time going through each of them. They can further clarify many things for you when you are dealing with anti-money laundering activities. 

Use the resources you can to upgrade your software and aim for efficiency at all times. Never forget that there is always a solution to avoid high costs, as we stated above. Otherwise, your company or organization will always be protected against fraudsters at the highest level whenever you seek to upgrade your AML software continuously.


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