What Is AML Software?

Anti-money laundering (AML) software allows organizations to isolate suspicious activities by individuals or companies attempting to gain income via illegal means. Compliance professionals use this software to adhere to regulations (e.g., the Bank Secrecy Act) and organizational policies on financial fraud.

Managers and accountants for various departments might also use this kind of software to help them evaluate new suppliers and customers. Financial institutions and banks also use anti-money laundering software to identify fraudulent and suspicious activities that negatively affect profitability and business reputation.  

Organizations can use this software to automate AML compliance checks and avoid conducting business with compromised individuals or organizations that are suspected of terrorist financing, financial fraud, or manipulation of the securities market.

Anti-money laundering software draws on data from various sources to deal with financial transactions, including accounting software and enterprise resource planning (ERP) systems. For big organizations with large numbers of financial dealings, integration with company performance management software might be helpful.    

In this article:

Why Is AML Software Important?

Anti-money laundering software is typically an integral component of an organization's AML strategy. It can be essential for meeting the legal requirements that apply to an organization, depending on the industry and relevant legislation.

In the US, for instance, adherence to the 1970 Bank Secrecy Act requires a lot of administrative efforts, such as a thorough external audit process and various reporting requirements. The EU’s 2017 Anti-Money Laundering Directive and the UK’s 2007 Money Laundering Regulations are also very complex.  

Complying with regulatory requirements specified by AML legislation often necessitates handling large volumes of information about individual transactions and customers, which could be more than a human AML officer could deal with daily.

AML software can process large amounts of information accurately and efficiently—screening data for AML officers and helping them regarding their obligations to their organizations and the financial authorities.  

Related content: Read our guide to AML in banking (coming soon)

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Types of Anti-Money Laundering Software

There are four fundamental kinds of software that address AML organizational demands:

  • Transaction monitoring solutions—focus on identifying suspicious transaction patterns, which could lead to the filing of SARs or STRs. Identification of suspicious transactions is a component of the KYC obligations.
  • Currency transaction reporting solutions—handle reporting obligations for large transactions ($10,00 and more in the US).
  • Customer identity management solutions—assess different negative lists (including OFAC) and are an initial and continuous part of KYC requirements. You can also use electronic verification to check against other databases and confirm that the customer’s ID is valid. Examples include electoral rolls, post office delivery databases, electricity supplier lists, and telephone lists.  
  • Compliance management software—helps organizations adhere to AML regulatory requirements, record and deliver appropriate staff training, and keep the required evidence of compliance. In addition, there should be audit trails of activities undertaken by compliance officers, specifically regarding the management of alerts raised concerning customer activity.

Top AML Software Solutions

Here are some of the best software solutions that organizations use to support their AML efforts.

Sanction Scanner Transaction Monitoring

Founded in 2019, Sanction Scanner provides anti-money laundering solutions and serves organizations in over 35 countries. Core features of the transaction monitoring tool include:  

  • Dynamic scenarios and rules—dynamic rule-writing capabilities allow you to develop the most appropriate strategies and practices without creating any code. As a result, you can pay attention to correct alarms, decrease false positive alarms, and minimize your control workload regarding your scenarios.
  • Fast response to suspicious transactions via real-time alerts—with the real-time alarm system, you can view the warnings of the transactions based on your ruleset and scenario, as well as the transaction’s alert level (there are five levels).
  • Peer group analysis—the transaction analysis function lets you study the accounts that trade with one another. You can view how these accounts relate to each other and the account name, volume, and balances.  
  • Dynamic customer risk assessment—you can decide specific criteria based on characteristics such as your customers’ age, job, and income and give them risk scores, in keeping with these criteria. Then, you can create alerts for various customer risk scores ranging from low to critical, and you can make transaction rules based on these scores.

Refinitiv World-Check Risk Intelligence

This solution provides reliable and accurate details to assist you with your decision-making. It has hundreds of analysts and specialists worldwide, following the most strict research guidelines. They bring together data from reputable and reliable sources—including government records, watch lists, and media searches.

Key attributes include:

  • Accurate intelligence—following the strictest guidelines for inclusion criteria and research methodology, ensuring stringent quality control.
  • Special expertise—monitoring areas according to their area of expertise, along with language abilities. Many analysts have worked with federal and state governments.
  • Up-to-date data—with research centers worldwide, World-Check offers continuous monitoring of enforcement and regulatory lists, sanction lists, and thousands of dependable media sources.
  • Screening capabilities—data features hundreds of keywords and more than 60 risk areas that let you filter and create focused screening while minimizing false positives.
  • Robust search capabilities—creating links between related subjects lets you identify and search criminal associations and networks.
  • Integrability—with the information presented in a very structured format, it is easy to integrate into your screening processes over various software platforms using popular formats.  

BlueCheck KYC Identity Verification

BlueCheck helps financial institutions conduct KYC checks, including identity and age verification, to meet anti-money laundering regulations. Key features include:

  • Multiple datasets to confirm information—a combination of proprietary and commercially available databases are queried to verify the information. BlueCheck can increase the likelihood of a successful verification by using this combination of resources, streamlining the onboarding process.
  • Smart Database Navigation—Using smart database navigation, BlueCheck can automatically verify the majority of customers. Queries move through the most accurate databases commercially available to ensure a match.
  • Quick Implementation—Using our DirectAPI or CustomJS framework, BlueCheck Identity Verification can deploy quickly, saving your business time and money.
  • Set How Users Are Verified—BlueCheck offers a host of verification methods giving users a choice and alternatives when identifying themselves. For example, allow for name & address, last 4 of SSN, or Photo ID verification.
  • Encryption & Security Standards—BlueCheck utilizes multi-layer data encryption to ensure data is securely transmitted and stored, protect against malicious actors, and safeguard the verification process.
  • Developer & API Documentation—thoroughly documented REST API available in addition to the verification plugin.
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Schedule a call with a BlueCheck specialist to learn more about our Age & ID Verification solutions. Ask about price savings when bundled with Payment Processing Services.