Choosing the Right Anti-Money Laundering Provider: Getting the Answers You Need to Make a Smart Choice

Regulation and Compliance

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Joe Susienka

Mar 19, 2018

A lot of change is affecting the banking industry, which is always followed by new and tougher regulations, often related to anti-money laundering. In January alone a regulation was discussed by the Senate regarding a beneficial ownership database. Choosing the right anti-money laundering provider will be key to successfully navigating all these changes. As new payment initiatives like real-time payments drive anti-money laundering requirements, getting a program -- and a vendor -- in place that will make it possible to introduce new payment offerings while limiting compliance costs can give financial institutions a big competitive advantage.

Are your existing AML solutions up to the task? As you consider that and possibly begin the process of evaluating new providers, here are some important questions you need to have the answers to…


Flexibility is deceiving because it’s one of those buzzwords that all providers claim to offer. In order to know how flexible a provider’s solution really is, however - particularly as it relates to new payment offerings, regulations, and changes in a product’s risk profile -- you have to ask specific questions:

  1. How quickly (and at what cost) can a new real time payment offering be set up with proper monitoring? The answer to this can be the deciding factor in whether or not a financial institution can even bring a product to market.
  2. Is your solution reliant on logs to feed in payment data? Newer AML solutions are better equipped to interface with new payment types that can be set up via API’s and prefer checks in-line with the transaction.
  3. How long does it take to set up a new monitoring rule and are costly outside contractors necessary to do so? Adding new rules or even changing the configuration of a rule can be a costly venture on older AML systems. Newer solutions offer much more flexibility that allow users to change rule parameters in the AML system’s user interface (UI) without code changes.
  4. Can you adjust the system yourself to make it more effective over time by reducing false positives (some solutions even offer ‘What If” analysis to look back at historical data to see how this change would have affected the total alerts created)? Having quick, direct access to this data can make fine tuning the system faster, more effective and a lot less painful.

Modern Features and User Interface

Are risk scoring, data collection and data visualization core functions of the system? While many static rules that require a lot of manual effort to investigate still need to exist, new solutions include standard functionality such as risk scoring, data collection, and even data visualization tools that can help reduce false positives and decrease the time spent reviewing alerts. According to Brighterion, about 99% of current alerts are false positives. Risk scoring, paired with predictive analytics, builds a dynamic profile of accounts that allows for automated detection of scenarios that would not be detected by static rules, while also reducing false positives that require investigation by compliance staff. To get a complete view of transactions going in and out of an account, new data visualization tools allow investigators to quickly see links between accounts that can cross between payment types, versus having to dig up information stored in different locations.

Modern UI capabilities then present the information to investigators allowing them to spend less time per alert and therefore decreasing labor costs, which according to Lexis Nexus make up 70% of the annual cost of any AML compliance program. With all of the changes going on in financial services and compliance, it’s important to look for an AML provider that is in tune with the market and ready to address new regulations. To truly tell if a provider is ready to handle the rigors of this new risk landscape, tough questions have got to be asked. Are they up-to-speed with all the changes that are happening and can they help you be prepared? Are they familiar with new machine learning capabilities that have come to market offering a level of transaction monitoring? How will they add or adjust their product offering based on new regulations? What support options are available? Answers to these questions should be offered willingly up front. If a provider waits for you to ask, that might be a red flag that they aren’t going to be a good partner going forward.

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Joe Susienka

Joe Susienka, an experienced B2B payments and compliance specialist, helps deliver secure payment solutions that meet the compliance needs of organizations. He is a Product Manager for Bottomline Technologies and is both CAMS and PMC-IV certified.
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