Client Portal overview
November 11, 2021

Your Guide to AML and Onboarding

Key takeaways:
  • Keeping ahead of the curve is a major part of AML, tackling regulations effectively will give your business the competitive edge for the next 10 years.
  • Anti-money laundering is crucial when it comes to onboarding and maintaining a client relationship.
  • How your company handles these processes can impact its efficiency and success.
  • Using AI and automation can provide a more definitive assessment of your client's conduct and profile.

What is AML?

AML stands for anti-money laundering; it's a critical part of any financial company's due diligence. It's made up of a series of rules and regulations that help to prevent criminal activities, including disguising illegally obtained funds. So, obviously, it's pretty essential to get it right.

Banks and financial institutes are burdened with keeping an eye out for any suspicious activities linked with their clientele. This entails monitoring past and future transactions. While AML may start when onboarding a customer, that's just the beginning; it's an ongoing process. Although all the rules, regulations and procedures are set out to help detect any criminal activity, that doesn't make it an easy undertaking, or a full-proof one.

How does the AML process look like during onboarding?

Technically, AML starts when you begin verifying your client's identity and is heavily linked with your business's KYC (know your customer) efforts. Once you've identified your client, your next step would be to run a KYC identity search, PEP screening, adverse media search, global sanctions, and scour any watch lists. Naturally, using modern onboarding solutions like HelloFlow, equipped with digital tools and automation makes this step as simple as clicking a button. Best of all, it can be completed within just a few minutes, allowing it to look for AML red flags in a more holistic fashion.

On the other hand, more traditional methods rely on banks to create their own customer profiles and dig through bank records. If that sounds like searching for a needle in a haystack to you, that's precisely how laborious it is. Red flags and risk ratings can be applied to a customer's profile based on specific financial behaviors.

This kind of AML check can be troublesome as it is based on a particular set of rules and doesn't account for money laundering that works outside of these set parameters. It doesn't adapt quickly enough to emerging suspicious activity either. To put it simply, it doesn't look at the whole picture. In fact, it can have a false positive of over 98% percent, whilst regulators may feel it's better to air on the side of caution. This just means that any efforts needed for high-risk cases are diverted elsewhere.

What is an ongoing AML check?

Think of an ongoing AML check like a quick check under the hood of a car. It's your way to verify things are still as they should be. This regulation ensures that financial institutions continue to monitor clients, confirming they don't pose any new risks. And if they do, catching it sooner rather than later.

Ongoing AML checks kick off as soon as onboarding is completed. It's not only essential to conduct these checks due to regulatory demands but to instill trust in all your business dealings. AML checks are important to prevent a loss of clientele and preserve your reputation. It is particularly important when dealing with customers that are flagged as high-risk so that your company can keep a consistent and detailed KYC profile. Having a thorough AML overview also unlocks opportunities other institutions don’t have the nerve to tackle. You can comfortably take on higher-risk clients that others aren’t equipped to, knowing that you have the right tools to track their behaviors.

Client Monitoring - AML - Digital Client Onboarding Process
Digital onboarding solution allows full automation of AML checks.

What does the ongoing AML check look like?

Like during onboarding, an ongoing AML check also requires PEP screening, adverse media search, global sanctions, watch lists, and KYC identity search. These processes can be executed using traditional methods, partial automation, or full digital integration. The traditional method isn't favored as it is slow, cumbersome and relies on human interpretation, which can lead to shortcomings.

Partially automated AML offers lower risks of errors but can lack transparency for stakeholders across the board. Full digital AML minimizes all risks and pivots with regulatory changes flawlessly, making it highly preferable for compliance and complete visibility.

Digital-centric AML provides a fuller picture using analytical tools, which can also be followed up using traditional methods when red flags crop up. This method also means no bugging customers for information every time you do an AML check because you'll have all the data and records on hand already. There’s nothing more frustrating for a client than regularly having to send documents through or filling out what may feel like unnecessary forms on a semi-regular basis. It may very well be the driving force behind customers taking their business elsewhere.

How does HelloFlow help you complete AML checks with its no-code solution?

HelloFlow makes digital onboarding, and AML checks a walk in the park! It's a simple recipe of integrated tools, like WorldWatch Plus and WorldWatch Corporate, with a generous seasoning of no-code that makes our all-in-one platform so reliable, convenient, and secure.

The cherry on top? Sit back while your AML and onboarding system transitions with regulatory changes effortlessly. You'll never have to worry that you're falling behind on compliance, even if you operate across multiple different countries. The beauty of automation and AI is that it saves you time and money that would otherwise be exhausted on less-than-perfect human resources. Want to onboard clients faster and elevate your AML process? Book a demo with us today!

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