Key Trends Driving AML Compliance Transformation in 2021

In 2020, AML professionals faced a perfect storm: a tumultuous business landscape, millions of dollars in government relief, and a general vibe of uncertainty. In dark times, fraudsters are eager to capitalize on the chaos and slip under the radar for their own financial gain. Now, perhaps more than ever, AML compliance teams recognize the urgency of implementing dynamic anti-money laundering frameworks to identify and stop fraud in real time.

Based on the events of last year, here are a few key trends driving AML compliance transformation in 2021:

A Push for Seamless Customer Experiences Increases AML Risks

A recent Aite Group report notes that FI executives want their customers to be onboarded more quickly and seamlessly. However, doing so also usually means that the risk of financial crimes is elevated. 

Part of the reason why the customer experience suffers from friction is due to extensive safety protocols in validating information and spotting AML potential. Currently, the two top pain points for financial institutions is the presence of too many false positives with existing solutions and the struggle with harnessing internal data to feed into analytics and fraud detection systems.

To overcome this moving forward, FIs must embrace innovation in financial crime control. Those that are able to quickly extract customer details and minimize financial risk can turn their frictionless execution into a competitive advantage. 

Cost-Effective AML Strategies Will Be a Priority

COVID-19 has left a lasting mark on AML compliance. Many teams are still working remotely, while customer behaviors have changed and exposure to financial crime risks have grown. 

In addition, financial crime collaboration is growing. Crime networks are becoming more sophisticated as technology enables them to quickly steal credentials, create synthetic identities, and conceal themselves from detection. Throwing more bodies at the problem is expensive, which is leading AML leaders to consider alternative methods to improve fraud detection and operational efficiency.

In response, FIs have had to adjust their short-term strategies and reprioritize planned efforts. This includes making adjustments to how they operate, along with attempts to reduce spending. Shifting to more innovative AML compliance approaches can help to continue in this new direction.

Current AML Compliance Solutions Will Be Traded for Innovation

Financial crimes that anti-money laundering teams fight against continue to grow in complexity, and FIs can no longer afford to fight these crimes in silos. Many are recognizing the value of innovation as the single most effective way to keep pace with evolving tech-savvy criminals. 

Specifically, innovations that can replace or complement manual processes identify unknown threats and broaden risk coverage without incurring higher operational costs are of particular interest. Solutions like DataVisor’s multi-layered approach to fraud detection and prevention are sharpening anti-money laundering intelligence and breaking down silos that limit data sharing and analysis. 

DataVisor also provides Knowledge Graph, an advanced linkage analysis tool to detect complex money laundering activities and money mules quickly and accurately, by creating a holistic view of omnichannel data and discovering multidimensional connections. Want to discover more about DataVisor’s alignment of people, processes, and technology?  Watch DataVisor Fight Fraud. Get a live demo.