Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF): Case Study


Implementation of an AML/ATF Monitoring and Controlling System


The issue

A transfer agent has decided to rely on technology to receive support in establishing, maintaining and optimizing compliance with AML/ATF regulations.

The approach

The implementation of an AML/ATF solution is to be considered and conducted as a project. We assisted the Compliance Officer, who acted as project leader, to set-up the project team and the pilot committee, to plan and and organize workshops and to conduct the overall project under the sponsorship of the Top Management. In particular, we provided assistance on three areas:

 

1. Identification of client needs and AML tools pre-analysis

The first step was to identify client needs based on specificities like the transfer agent's activities, the regulation applicable or the distribution schemes. The subsequently executed pre-analysis process covered a wide range of tools including the following functionalities:

  • Transaction monitoring – client segmentation, scanning and analysing data for potential money laundering activity;
  • Customer risk rating tools;
  • Watch list filtering – screening new accounts, existing customers, beneficiaries and transaction counterparties against terrorist, criminal and other blocked-persons watch lists;
  • Automation of regulatory reporting, filing of suspicious activity reports (SARs), currency transaction reports, or other regulatory reports with the government; and
  • A detailed audit trail to demonstrate compliance efforts to regulators, as well as respond to FIUs and other requests

2. Check of data quality

Before best of breed systems can be implemented, data quality is a vital consideration. Deficiencies or inconsistencies in existing financial and KYC data can have large impacts on the effectiveness and reliability of the information supplied by even the most advanced AML systems. Our data management experts helped our client to prepare and cleanse data to ensure optimum data quality for the seamless construction of data feeds and correct manipulation of data during data model implementation.

3. Design adequate customisation and operational procedures

We worked closely with the project team and with the tools providers implementing the systems. During implementation, we contributed to the customisation and configuration of risk views aiming at optimum results (e.g. low rate of false positive alerts). In addition, we designed effective operational procedures which define roles and responsibilities of each actor (Compliance department, TA officers, IT, etc.).

The outcome

Our client benefits from an integrated AML/ATF system to play a key role in:

  • Providing access to reliable transaction and customer data;
  • Ensuring data consistency, timeliness and availability when it is required;
  • Monitoring suspicious activity in an accurate, timely and effective manner;
  • Assisting in the management and reporting of cases flagged for investigation; and
  • Providing management with key AML/ATF management information on a daily and monthly basis