KYC AML checks automated by Regtech

Regtech (Regulatory Technologies) can be explained as platforms that combine regulations with technology. The global Regtech market has started growing since 2015 and has started picking up. The  reason for this growth is due to the expanding obligations of financial institutions. There is widening horizon of regulations and audits on Financial Systems. Additionally, it shows that the Regtech market have a chance to grow and cherish. One of the areas Regtech provides solutions for is Anti-Money Laundering and KYC compliance (KYC AML checks).

Screening Software for KYC AML checks

Even if AML regulations vary by region and country, the main components are the same. According to AML regulations, institutions under obligation have to implement costumer related controls during on boarding processes. These are “Know Your Customer” and “Customer Due Diligence” procedures. The purpose of these procedures is to determine the risk level of the customer who will be on boarded on the Financial Institutions.

According to AML regulators, sanctions lists, PEP lists and adverse media data are significant to determine the risk of Customer. Therefore, Sanction, PEP and adverse media data is very important. Sanction, PEP and adverse media screening software makes it easy for banks to scan their customers in this AML data. There are thousands of sanctions and PEP lists published and present currently. There are also hundreds of thousands of adverse media data published. The number of these data change on day to day basis. The dynamic structure of these data makes manual controls impossible.

AML Screening software help banks to control their customers in global comprehensive and real-time money laundering data. 

AML Transaction Monitoring Software

Financial institutions are responsible for detecting and preventing suspicious transactions. Financial institutions carry on a large number of customer transactions throughout the day. So how do financial institutions control the large number of transactions taking place during the day?

It is not possible for financial institutions to manually control the financial transactions they mediate during the day. There are banks and financial institutions that perform thousands of transactions in a minute. All these transactions are monitored automatically. It is according to certain rules by Central bank. Software generates the alarm based on these rules and sends it to compliance officers. Thus, AML compliance officers do not manually control all transactions (this is already impossible) so, they only focus alarmed transactions.

Transaction Screening Software

Another factor that financial institutions control in the transactions they mediate is the receiver or the sender. Companies like Riskpro compile thousands of sanctions, banned and PEP lists and publish their data. No bank wants to mediate the transfer of money sent to a banned person and who has been sanctioned. Because sanction violations have severe penalties. There are published large number of “terrorist wanted lists”. Similarly, no financial institution wants to mediate the terrorist financing.