Will firms who ignore the benefits of AML software generate greater risk potential? 

30th May 2019 3565 - Blog Posts

Anti-money laundering is a currently a key priority for financial services and law firms especially as numerous cases where firms have failed to meet their compliance deadlines have hit the headlines of late. How will AML software impact the future?

The rise in AML breaches

The FCA have issued some huge fines for AML failures recently including a £102.2 million penalty to one bank for breaches, the second largest fine of its kind issued by the regulator. Similar crackdowns are also taking place in other jurisdictions – German regulator BaFin has ordered one of the country’s largest FinTechs, N26, to boost its AML controls immediately, and two of the largest Nordic banks have suffered serious reputational damage as a result of a 200 billion EUR money laundering scandal. Law firms have also been placed in the spotlight as the Solicitors Regulation Authority reviewed 59 firms over potential money-laundering breaches and has now launched further probes into 26 of those.

5AMLD on the horizon

With the implementation of the 5th Anti-Money Laundering Directive on the horizon, which includes enhanced due diligence, a new list of ‘blacklisted countries’ and stricter controls on cryptocurrencies, it seems some firms are still struggling to comprehensively implement the fourth iteration.

Many of the breaches reported by regulators involve inadequate management of reporting risk and compliance controls, so could improved AML software negate these issues? AML software can significantly speed up compliance checks, automating many manual processes and freeing up in-house resources to concentrate on core, profit generating activities. This higher degree of automation also reduces the risk of human error, which is a significant factor in AML breaches.

Establishing a robust, global framework

AML software also takes into account changing regulation, such as 5AMLD, which comes into force next January, and crucially it also factors in nuances in AML and KYC best practice in different jurisdictions which could be particularly significant for UK-based firms post-Brexit. Organisations with a global footprint often have AML policies drafted by headquarters and AML software can provide a more coherent, robust framework that is applicable globally.

Lawson Conner’s AML software, MaxComply can offer unparalleled support with fast-changing anti-money laundering regulation, as well as access to high-level compliance expertise. It assists onboarding, decision making processes and has been proven to significantly reduce AML processing time.

Andrew Frost Executive Director - Lawson Conner

Andrew Frost

Executive Director

E: afrost@lawsonconner.com

D: +44 (0) 203 696 2568