We are halfway into the first quarter of 2021, and already certain themes have become apparent within AML. So, what will the rest of the year have in store for us, and what more do we predict will crop up across anti-money laundering and financial crime?
Here at Contineo FRS, our SMEs have been digging deep into the ever evolving AML landscape and have shared some of their top predictions.
Increased Transaction Volumes
FinCEN announced they will be implementing threshold changes for international transactions. The threshold will be decreasing from $3,000 to $250, resulting in an increased volume of transactions required to be monitored and a larger number of alerts to investigate.
As a result of this decision, it will drive the need for Financial Institutions to pay close attention to their systems and it will become critical that they have efficiently tuned models.
It’s been over a decade since cryptocurrency first made an appearance, but with Covid-19 and the recent news on Wall Street, the interest towards crypto assets has increased. More and more retail customers are interested in entering the crypto world.
We have been looking into the Financial Conduct Authority’s (FCA) AML regime and how it covers specific crypto asset business activities. Our expectation around this is tighter monitoring in exchanges and the creation of new crypto businesses under the regulator scrutiny.
Data Sharing & Protection Technologies
There has been an increased desire for data sharing amongst the public and private sectors, which was further echoed by the FATF President in a drive to fight against money laundering. The unity and collaboration of information exchange across the two has highlighted a new trend.
What we predict to see more of, is the sharing of transaction monitoring information while investing in new technologies that protect data privacy for bank’s clients.
Artificial Intelligence & Machine Learning
Artificial intelligence (AI) and machine learning (ML) have been an increasing trend for a number of years. However, due to the impact of Covid-19, there has been a shift towards the use of digital banking services. It is expected that AI and ML will prove their value against traditional rules-based systems, as they have the capability and capacity to adapt to ever evolving methods used by financial criminals in new services.
Robotic Process Automation (RPA) has seen a rise in investment. This year, it is anticipated large banks and Financial Institutions will re-evaluate the effectiveness of the past RPA implementations in KYC/AML to adapt to the challenges posed by the pandemic.
The Rise Of Cloud Technology
According to AML experts, analysts spend the majority of their time sourcing data rather than fixing problems. Cloud technology is on track to change the future of financial crime and compliance. Not only does it benefit the organisation by meeting their compliance needs, cloud technology also allows analysts to source information from the system and detect FinCrime more accurately through increasingly advanced analytics.
Our prediction – we will see an uptake in the use and development of technology, focusing on transaction monitoring and screening programs.
Get Ahead Of The Game
Financial crime is fast moving and ever changing. Banks and FI’s need to make sure they are keeping up pace and staying ahead of the curve with data, technology and AI being a key focus for 2021. Contineo FRS services and solutions can alleviate that burden. Learn more about our FinCrime List Manager or FinCrime Case Manager and speak to us about a product demo here.