The effective governance of AML issues and its timely scrutiny is vitally as important as much as its AML technology, given the ever-increasing regulatory duress.
Some of the key organizational challenges within transaction monitoring system
indeed needs attention in length, to effectively mitigate ML/TF risks, particularly in the light of rapid technological advancement.
Especially, when organizations have failed to learn from lessons learnt it becomes even more difficult to face this challenge, considering the launderers themselves are becoming more efficient using the same technology and loopholes.
Senior management teams have inherently laid down deep trodden insights and
always had unruly expectations from transaction monitoring systems and heavily relying on “out of the box” solution approach instead of customizing.
Added to that have been in the inherent woes of data integrity and sanctity that
yield no better results. Major banks, today, and would still continue to pay
hefty fines for the very same reason. Without a strategic approach combined with improperly identified requirements would result in non compliance.
Institutions again are heavily relying on scenarios and thresholds that are more
industry generic rather than insisting, basis their own products, locations and
Therefore improving on data quality and related architecture has become imminent for the solution, to address the issues at the source system by changing operational procedures, and implementing application controls that include validations, while dealing with system gaps at the same time.
So, who is going to do all of this. Yes, it is the compliance analyst who will
have to whistle blow these to the management at the right time and while
implementing these high branded third party vendor management systems. It is also crucial for the analyst to share knowledge in a timely manner via cross functional teams during vendor selection process, from compliance, for best informed decisions.
Other multi-phase processes and factors for consideration include a) case
management and related work flow with robust reporting capabilities, b) data
analytic s allowing analyst to fine tune threshold limits c) customize alert flow
interface without support from the vendor, d) performance responsiveness for
requisite scalability within the overall architecture, to name a few.
Project management is yet another pivotal aspect to be established with the
support of executive sponsor, while obtaining organizational strategy, operations and compliance perspective.
Many challenges and opportunities entail in this quest to identify the right
suspicious activities by bad actors, and therefore require system planning,
initial threshold setting and tuning while implementing risk focused scenarios.
In depth understanding of the source data along with its coverage is imperative
often to uncover data architecture fallacies, with the right transaction codes,
to ensure that the right data is flowing into the monitoring system.
Hence it is as important for the stakeholders that include the compliance analyst to promote a culture of coordination and build synergies among various disparate teams to react in a timely manner when changes are warranted, for a well desired output from the monitoring system.
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