As part of reviewing suspicious activities, financial institutions will require anti-money laundering (AML) case management. With its detection rules, transactions linked to criminal activities can be picked out and escalated accordingly.
Case Management Processes and Steps
Case management processes vary depending on each financial institution and the regulations of each country. Typically, this process includes the following six steps:
Firstly, analysts at financial institutions will screen all the transactions. Detection rules have initially been put in place within the system so that suspicious activities can be singled out, for example transactions to and/or from high-risk jurisdictions. This is an essential first step so that suspicious transactions will not go unnoticed.
Once the suspicious transactions have been flagged out, analysts will proceed to assess whether these transactions are indeed related to criminal activities. This means a more thorough analysis is conducted on the customer background and the activities. Analysts will then determine the risk level, ranging from low to high, for the respective case based on their assessments.
Planning helps the team to allocate their manpower and time according to risk levels. A higher risk case will naturally warrant greater amount of planning and resources. A dynamic team is required during the planning stage in responding to changing scenarios of the detected activities.
With a clear plan in mind, the team can proceed to implement the plan. The success of the implementation depends on the support given by the financial institutions. The right amount of resources can help the team to execute the plan timely and effectively.
At this stage, the team will follow up on the result of the implementation stage. Clear and targeted key performance indicators (KPIs) are required so that the team can measure the success of their plans.
After following up on the case, the team should gather feedback from within and outside the AML team. Inputs from stakeholders outside the AML team is useful to determine the missing gaps in the whole process.
Why is it Important?
With the proliferation of money laundering cases, financial institutions should promptly investigate and escalate any suspicious activities. Given the massive volume and veracity of the transactions, compliance team often feel-overwhelmed when handling alerts and investigating cases. Using traditional solution is insufficient to detect these cases. Without a proper structure governing the compliance teams, this will result in backlog of cases, delay in escalation or even misdirection of alerts.
Traits of Effective AML Case Management System
For AML case management system to be effective, it has to possess the following traits:
- Highly customizable workflows
Workflows within the system are customizable, allowing greater flexibility regardless of the role and the size of the teams.
Each team member is accountable at each stage of their work. This ensures that audit trails can be protected where every process of the AML case management system is properly documented.
With better Artificial Intelligence (AI) and Machine Learning (ML) techniques, the number of false positive alerts can further be minimized, hence making the system more robust in detecting suspicious activities.
- Quickly adaptable to AML regulatory changes
The case management system can be adjusted to meet the changing AML regulations, ensuring that the system is constantly adaptable to the current money laundering trends.
The AML case management system also offers automated Suspicious Activity Reports (SARs) filing feature, increasing the productivity of the team further in handling a case.