Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations are constantly evolving, making it difficult for financial institutions to stay compliant. The challenge is even greater for fast-scaling digital banks and fintech companies that need to comply with regulations in multiple countries and regions. Traditional AML systems, based on rule-based algorithms, often generate a high number of false positives, leading to increased compliance costs and reduced operational efficiency.
Utilizing Advanced Technologies
Global regulators such as the Financial Action Task Force (FATF) have always stressed on the importance of using modern technologies in AML. Advanced technologies, such as machine learning and big data analytics provide a comprehensive approach to detect and prevent any risks associated with money laundering or other illicit activities. They can be used in multiple AML use cases such as customer screening, transaction monitoring and AML risk assessment. These solutions enable organizations to identify suspicious activity more quickly and efficiently than ever before, therefore providing them with an extra layer of security.
Robust Monitoring Systems
Robust monitoring systems with proper audit trails provide organizations with a comprehensive view of potential money laundering schemes as well as other financial crimes. With vigilant monitoring in place, organizations can effectively mitigate their risk level by ensuring that all suspicious activity is accurately identified and addressed without delay. Additionally, these audits serve as additional evidence of compliance when reporting to regulatory bodies.
Risk Management Strategies
It’s important for organizations to establish clear guidelines for their AML policies and ensure that they are properly implemented across the entire organization. Having a well-defined policy allows companies to effectively manage risk while still maintaining efficient operations at all times. It is also crucial to regularly review existing practices and assess any potential weak spots in order to keep up with the ever-evolving regulations pertaining AML/CFT practices .
The Community Approach to AML
A community-based approach to AML is necessary for financial institutions to achieve holistic risk coverage because it allows for the sharing and analysis of information and intelligence among a group of organizations. This allows for the identification of patterns and trends in financial crime that may not be visible to individual institutions. Furthermore, criminals are becoming increasingly sophisticated in their methods and are able to take advantage of silos that exist in traditional AML systems. A community-based approach allows for the breaking down of these silos and provides a more comprehensive view of financial crime.
Holistic Risk Coverage with Tookitaki AMLS
Tookitaki's FinCense is a comprehensive and end-to-end AML compliance platform designed to assist financial institutions in detecting, preventing and managing financial crimes. The platform is built on a foundation of "collective intelligence," which utilizes the expertise of a network of specialists in various aspects of financial crime to create an exhaustive library of typologies. This enables FinCense to seek out a diverse range of criminal activity.
The IAD version of FinCense is meant for fintech companies, including digital banks, e-wallets, and payment services companies, while the SAM version is meant for large traditional banks. With the use of advanced technologies and robust monitoring systems, these modules of FinCense provide financial institutions with holistic risk coverage and enable them to stay ahead of the curve in their compliance efforts.
AMLS comprises of four modules – Transaction Monitoring, Smart Screening, Customer Risk Scoring and Case Manager – that are optimized for Intelligent Alert Detection (IAD) and Smart Alert Management (SAM).
- Transaction Monitoring: This module helps financial institutions identify and detect suspicious transactions, using advanced analytics and machine learning techniques. It also allows for the customization of transaction monitoring rules to meet specific regulatory requirements.
- Smart Screening: This module helps financial institutions screen customers and transactions against various sanctions lists, watchlists, and other regulatory lists to ensure compliance with AML regulations. It also uses natural language processing (NLP) and machine learning to reduce false positives.
- Customer Risk Scoring: This module helps financial institutions assess and manage customer risk by analyzing various data points, such as transaction history and demographic information. It also uses machine learning algorithms to continuously update and evolve customer risk profiles.
- Case Manager: This module helps financial institutions streamline their AML compliance workflow by providing a centralized platform for case management and reporting. It allows for easy assignment, disposition, and reporting of cases, as well as the integration of data from other AMLS modules.
Tookitaki’s Community-based Approach
Tookitaki's community-based approach is based on the principle that financial crime risks are not restricted to individual financial institutions. Rather, these risks are interrelated and can be better understood by sharing information and intelligence across a community of financial institutions.
The Anti-Financial Crime (AFC) ecosystem is a separate entity, a growing community of anti-financial crime experts, born from Tookitaki’s vision for safety & security. Its goal is to discover the hidden money trails of criminals. Similar to global monitoring & policy-making institutions, the AFC ecosystem is a body of experts covering the entire spectrum of money-laundering. Their wealth of experience is operationalized to enable partner financial institutions in uncovering money trails which aren’t discoverable by today’s standards.
Tookitaki's software is powered by a collective intelligence of typologies, generated by the AFC Ecosystem, that provides the latest risk scenarios specific to each region. This allows financial institutions to stay ahead of the curve with the latest financial crime scenarios, regardless of the country or region they operate in.
Enhance Your Risk Coverage with FinCense
Tookitaki’s AML software provides holistic risk coverage for financial institutions in combating money laundering. Its community-based approach and range of modules enable financial institutions to stay compliant in today’s ever changing environment and uncover hidden money trails while also maximizing operational efficiency. If you're interested in learning more about how Tookitaki's FinCense can help your financial institution, request a demo today!
