One tough reality that banks must face up to is that money laundering, terrorist financing, and other forms of financial crime are on the rise. For one, these malicious agents have stopped at nothing to advance in their dark craft. For another, many crime rings and money laundering networks have taken advantage of the commercial crisis brought about by the COVID-19 pandemic. While banks struggle to rewire their systems for delivery in the “new normal,” these criminals have found it easy to disguise their methods and slip further through the cracks.
This turn of events is symptomatic of a problem that many banks have had for years: an inadequate approach to anti-money laundering (AML) case management. In the parlance of the banking industry, case management is the process by which bank personnel review and ascertain suspicious behavior from customers. Oftentimes, this is a matter of flagging individual transactions piecemeal, and then compiling case reports only when it’s time to submit to AML regulators.
If this is the approach that your bank has taken for the last few years, you are vulnerable to the evolving tactics of money launderers and terrorist financiers. You can turn things around by advocating for an integrated case management approach and investing in new tools to fight financial crime, such as transaction monitoring AML software. Below is a primer on integrated case management and how it will benefit your bank’s AML strategy, from your compliance efforts to your bank’s long-term security against financial criminals.
The Need to Go Beyond Basics: Why Small and Mid-Sized Banks Must Catch Up
Conventional approaches to AML, especially for small and mid-sized banks, often consist of periodic reviews that are only done when it’s time to present to regulators. Before presentation time, AML compliance staff likely only use basic AML software to track individual transaction histories and assess them according to rules-based factors.
But as regulations and requirements become more stringent, so do financial criminals become savvier about circumventing the system. This highlights the plain truth that basic AML solutions simply aren’t enough. Most have limited automation capabilities, aren’t scalable enough, and aren’t as compatible as they should be with third-party software. Worst of all, these solutions don’t allow banks to evolve their AML strategies beyond those of yesteryear. That keeps banks on the same one-note, only-as-needed approach to confronting the problem of financial crime.
There’s a steep cost to falling behind, especially for small and mid-sized banks. As time passes, they will have an even harder time meeting their compliance standards and risk incurring steep penalties from regulators. On top of facing issues related to compliance standards, these institutions will increase their susceptibility to attack. Money launderers and terrorist financiers may pick up on their lack of strong AML infrastructure and funnel their activities through small and mid-sized banks, as opposed to their larger counterparts.
The Benefits Offered by Integrated Case Management
Your own bank’s pursuit of integrated case management will reward you in several ways. The top advantages of this approach are the following:
A 360-Degree Vantage Point
First, an integrated case management approach will afford you a continuous vision of your bank’s overall AML situation—one which closely interlinks past and present transactions, and which can accurately predict what the future may hold.
By embracing a more modern AML system, you will go beyond studying individual cases and flagging them as false positives or sources of real concern. Instead, you will be able to look at your customers’ transaction histories from a 360-degree angle and discern worrisome patterns—and then move to block further activity before it’s too late.
A Smoother and More Adaptable Workflow
An integrated case management solution will also make the task of compliance much easier on your staff. It will enable them to be lightweight and flexible about their work, and to quickly adjust whenever your bank revisits its AML guidelines.
Automated Case Categorization
Your new case management software may also come with enhanced automation capabilities. These will come in handy for tasks like case categorization. The solution may be able to process case management data and then auto-classify it for the compliance team, sorting cases according to market segment, risk factor, and the like.
This will save your staff the cumbersome work of sorting cases manually using separate data applications. It will also decrease their chances of coming to the wrong conclusion based on simple human error.
Faster, More Accurate, and More Efficient AML Reporting
Your solution may also come with built-in reporting features, thus allowing you to generate reports that are based on real-time and up-to-date case management data. Case reports that would normally take weeks or even months to fully prepare can be produced in much less time, thus increasing your AML compliance team’s overall productivity. You can also configure the level of detail on these reports, and ultimately ensure that you submit comprehensive documents to your regulators.
Better Third-Party Software Integration
Lastly, an integrated case management solution will also be better at aggregating relevant data from third-party sources, including sanction lists or media releases. You can depend on your solution to work reliably with these and present you with information that will enhance your anti-financial crime response.
Use Integrated Case Management to Bolster Your Bank’s AML Program
One thing is for certain: for small and mid-sized banks to protect their assets and their reputations among customers, they will need to modernize their current range of AML solutions. In increasingly unpredictable circumstances, you will want your own bank to have the advantage over criminals. You will also want to be known among your peers and your regulators as an institution that takes AML seriously.
Fulfill your goals for your bank’s AML program, and explore an integrated case management solution today.