What is 'Anti Money Laundering’ (AML)
Financial institutions are mandated by the BSA AML (Banking Security Act Anti Money Laundering Act) and the CDD Customer Due Diligence provisions to establish AML Compliance procedures.
Financial institutions need to have process in place to verify and stop money moving through their systems from money laundering activities. All client accounts require comprehensive due diligence to verify their source of funds.
The KYC (Know Your customer) process should verify each client against International Sanctions Lists, OFAC (Office of Financial Asset Controls) , PEP Lists of (Politically Exposed Persons), Beneficiary Ownership in Sanctioned Entities and Sanctioned Countries. They should also be checked for Adverse Media reports against them. Money transfer transactions should be monitored to identify trends that point to money laundering. Suspicious activities need to be reported to FINCEN through the SAR (Suspicious Activity Report)
Huge Fines and Punishments face organizations that are found guilty of failing to verify money laundering.
The Challenges for your Compliance Team
The compliance team needs to establish the Policies and Procedures for the staff to use in their verification process.
As part of their day to day process all client facing staff have to conduct Account Opening Verification against terrorist and sanctions watchlists for new clients. When funds transfer transactions are requested, the compliance also needs to look at patterns of money transfers by the customer to ensure that money is not moving into suspect accounts for either terrorist or illegal activities. The CDD – Beneficiary Ownership rule requires verification of ownership of the client in sanctioned entities.
Manually keeping track of each client for AML is a daunting task. Compliance staff can be over whelmed with the amount of verification involved and may miss trends that may be easily noticeable if they had a system in place.
Conducting risk assessments of the business entities on a regular basis ensures all branches, IT systems, customer facing staff and other members involved in AML processes are following the defined processes.
GRACE Can help you Automate your AML Monitoring
GRACE AML helps you establish the processes of managing your client information verification against sanctions and terrorist watch lists in an automated way. Along with transaction monitoring, this will help you ensure that all clients are monitored for suspicious activities and brought to the attention of the regulators through Suspicious Activity Reporting.
GRACE ‘s risk assessment functions can help you conduct comprehensive assessment of branches, departments, locations and businesses to verify adherence to the defined process and identify risks and issues that are not being considered and manage the mitigation of these risks.
It helps you set up the policies and procedures, get online attestation and provides online training to staff.
GRACE makes the process of AML monitoring, comprehensive, effective and less costly by reducing manual work and ensuring that the compliance staff is able to keep an eye on high risk clients.
It helps you implement a visible system for AML monitoring and face examinations with confidence
Manage AML Policies and Procedures
- GRACE can help you define and manage the Policies and Procedures for Anti-Money Laundering for all the lines of Businesses of the organization.
- Manage detailed reviews and comments by all related departments including legal, compliance, client management and other groups
Conduct Online Attestations
- GRACE can help you ensure that all staff are sent the latest policy / procedures for them to read and attest online. This ensures that the latest procedures for checking AML are well understood by staff. Periodic attestation can help staff be reminded of the correct procedures for AML Verification
- GRACE can set up Attestation templates, as well as Attestation calendars for the staff / groups of staff can be included. Emails can be received to alert them about the attestation. and reminders can be sent. Attestation dashboard will allow the organization to see how many people are pending attestation and ensure all of them go thru the attestation process.
Conduct Online Training
- GRACE can help you set up the Training calendar for all of the staff to be trained periodically on the processes.
- Set up customized AML training based on your own business needs and processes
- Allow staff to be intimated about the training and take in online.
- Gather data about the status of their understanding and on their training to verify their understanding.
- Have a Training dashboard that can help identify staff members and their status of training
Conduct AML Risk Assessments
- AML Risk assessments are a big component of AML Monitoring . GRACE helps you can set up and use standardized checklists for periodic risk assessments across departments, business functions, lines of business, branches and locations
- You can set up Calendars for assessments and receive alerts on due dates. You can send out Online Risk Assessment Questionnaires to collect information. You can also physically conduct the assessments, record findings and risks. By classifying it in a standardized way, you can quickly identify the areas of risks across the organization, and manage mitigation
- Findings from Risk Assessments could also refine policies and procedures and lead to enhanced training, re-attestation and other processes as mitigation.
- Staff that is assigned to assessment or mitigation tasks can be alerted and can report online on the system on status of tasks
- The Risk assessment dashboard can help track status of assessments, findings and mitigation task status
My Portal for all Staff
- The My Portal function allows staff to see the queue of their activities and report on these requests, be it for AML verification, or training, or attestation.
Manage Automated Client AML Verification
- GRACE helps you manage client Information including residences, jurisdictions, legal entities, dependents, relations etc to track AML across customer entity. Client information can also be imported from source systems / loaded from excel to be brought into GRACE. Clients can be assigned to Staff for monitoring.
- Automated AML monitoring and, risk flagging can be initiated at the click of a button to pull information on these entities from industry respected sources into GRACE for clients existence in worldwide PEP (Politically Exposed Person) list, sanctions lists, watch lists with automated red flagging along with beneficiary ownership and Adverse Media information. All red-flagged information will be brought to the compliance officers attention. Compliance officers can also manually red-flag / mark false positive on the information. The client’s risk profile can be update based on the information. Information changes will also be audit trailed. Clients will also be monitored on a batch mode to identify any new risks seen with the client that warrant a SAR (Suspicious Activity Reporting)
Conduct Transaction Monitoring
- GRACE can automate the process of data load of transactional information for clients like funds transfers, Automated Clearing (ACH) wires on the system through APIs or file transfer mechanisms or excel / CSV file loads.
- GRACE can monitor transactions to see suspicious trends based on rules to red flag them to the suspicious list. Accounts to which money is being transferred could be flagged if they are sent to a Sanctioned Entity. Transactions that show patterns of suspicious activity can also be included into the Suspicious activity report for FINCEN
Client Risk Dashboard
- The Client Risk dashboard can help you take identify high risk profiles based on their risk scores from Sanctions Monitoring activity. It can help you drill into their status of violations, their transactions and the patterns.
- The dashboard can provide information on the status of AML monitoring queues and workloads of staff.
- The dashboard can help you identify high risk branches, processes and client groups to help you improve the process. It can also show you the status of training, attestation to ensure you are able to improve compliance
Issue and Case Management
- Issues and Case Management is inherent part of the GRACE workflow management. Clients at Risk can be added to issues which could need additional investigation to confirm their high risk status or be included into a SAR (Suspicious Activity Report).
- Issues can be assigned to staff, they can add in notes, escalate for review and close issues. Task management reminders can be sent out.
- Issue Dashboard can give senior management the view on all issues and their status of mitigation as well as patterns in issues.
The Great Value You Get from Using GRACE AML
Manage AML Comprehensively
Helps you have an integrated system for handling all AML requirements and a single repository of information for all queries, examinations and audits
Reduces Manual Labor and Errors
Relieves compliance staff of many manual hours of labor to search for information on the client against various sanctions list
Ensures Violations are Caught Early
Ensures all violations are caught through the automated process and red-flagged in an easy to identify manner to avoid the needle in the haystack problem
Monitor for Risks even when you are not looking
Be able to know new information available in the sanctions list or adverse media even when they are not looking for it.
Have a Consistent Process
Ensures the staff have a consistent process which can be followed at all times.
Monitor Suspicious Activity in an organized way
Monitors High Risk Clients and manages SAR(Suspicious Activity reporting) in an organized way
Conduct Periodic Risk Assessments to Improve Process
Manages risk assessments and identifies loop holes in the process
Client Classification and Management of Risk becomes easy
With an integrated web based access anytime anywhere, client information classification and risk grading them becomes simple.
Regulatory examinations can be handled with confidence
With a visible and streamlined process for AML,it is very easy to prove and show your process to regulators
Organization Ownership of Data
Organizations suffer when key risk and compliance staff leaves. The information is scattered if maintained solely by individuals and are lying on disks in various forms. GRACE becomes the single central repository of documents, data and processes enabling continuity even when key people leave the organization
Easy to Integrate and Customize
GRACE offers easy integration with organizational source systems to bring in funds transfer and other data at low costs. AML Monitoring can be done through a single system and the red-flagging using business rules during the data load process allows AML officers to focus on compliance instead of data gathering
Enormous Cost Savings
Enormous costs savings in unwanted labor in keeping track of AML, avoid regulatory fines, legal costs, reputation risks and empowers the organization in managing risks.
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