6 reasons your aml customer due diligence software might not be sufficient
TRANSCRIPT
6 Reasons Your AML Customer Due Diligence Software Might Not Be Sufficient
#1: False Positive Name Matches Must be Filtered Out
As an example, in the instance of due diligence on a Chinese entity or individual,
analysts might run into dozens of variations of a single Mandarin-language name. Open
source research and cross-referencing methodologies must be implemented to ensure the correct name is investigated.
#2: Red Flag Information Must be Cross-Referenced with Primary Sources
To mitigate data errors, human input is required to cross-reference information from
data-aggregation tools and AML software with authoritative primary sources on the open web.
#3: Screening for Politically Exposed Persons is Not Confined
to Database Checks
Given that Politically Exposed Persons (PEP) lists can contain data errors, analysts must conduct social media scrapings to flag self-
reported past or current public service employers.
#4: Words of Estimative Probability Convey Nuance in Analytic Findings
Words of Estimative Probability (WEPs) are an Intelligence Community (IC) practice that
enables analysts to express varying degrees of confidence in Anti-Money Laundering research
findings.Examples:
•Confirmed = 100% Confidence•Highly Likely = 93% Confidence•Likely = 75% Confidence•Possible = 50% Confidence
#5: Regulators are Honing In on Beneficial Ownership Requirements
FinCEN’s Final Rule on CDD requirements means that financial stakeholders must
identify and confirm the beneficial owners of a business entity during the customer
onboarding process. This presents challenges for those using automated transaction
monitoring systems.
#6: Link-Chain Analysis Can Clarify Complicated Business
Relationships
This is another IC methodology, which provides a visual chart of overlapping relationships pertaining to business
interests, transactions, directorships, and address histories.
“6 Reasons Your AML Customer Due Diligence Software Might Not Be Sufficient”
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