Anti-money laundering program: Five critical software implementation considerations

To deliver an effective, compliant fraud and anti-money laundering (AML) program, many firms decide to partner with a regulatory technology (RegTech) vendor. The vendor evaluation process often focuses on factors such as the scope and quality of its data, ease of use, and coverage of relevant industries.

While all of these are important, one often overlooked factor is implementation. How vendors implement their clients’ AML programs is critical. A slow implementation process risks undermining the customer experience and delaying the roll-out of new products and services. Poor support over time can become a chronic issue, weighing compliance teams down if, for example, the ability to add new rules and capabilities is impacted.

So how can firms assess what ‘good’ looks like in implementation? Here are five top considerations.

1. Pre-built rules and collateral

While onboarding times will vary based on the complexity of the implementation and specific client requirements, there are steps vendors can take to streamline the process. For AML solutions such as transaction monitoring and screening, one important feature compliance teams can look for is ‘plug-and-play’ capabilities that make the setup process more efficient. Offering a pre-built library of rules and typologies is one good example of this. In addition to demonstrating what a best-practice program looks like, these libraries can help teams get set up quickly without having to build everything from scratch.

Firms can also ask vendors about the supporting collateral available for implementation. This might include a rule library, an application programming interface (API) guide, and dummy data for testing. These resources help clients get started faster and get up to speed in their own time.

That said, the timeline also depends on the client. With cost-effective solutions and the right resources in place on their side, implementation can take as little as two weeks.

2. A personalized approach

A standard integration method, such as a REST API, requires in-house technical and personnel skills to manage complex, customized implementation requests. Some clients will inevitably have bespoke rule sets they need to manage, or particular challenges with the structure or quality of their data. This needs to be addressed up front to ensure the fraud and AML detection system works effectively post-implementation. 

To manage this complex array of requests, firms can ask vendors how they run the implementation process. A best practice approach is for each client to have a dedicated implementation consultant who supports the client through to go-live, ensuring continuity of service and a speedy response to inevitable questions and challenges. Ideally, this consultant will be flexible about working remotely or on-site with the customer, based on what will help the team progress more effectively.

TransferMate, one of the world’s leading B2B payments infrastructure-as-a-service companies, enables individuals to make seamless, cost-effective cross-border payments. But operating across more than 200 countries and territories and 141 currencies means the risks and typologies its team must monitor are not always captured by pre-built rule sets.

During its implementation process with ComplyAdvantage, the two teams communicated almost daily. Alex Clements, TransferMate’s Global Head of Financial Investigations and Monitoring, described this as a “one team, two organizations” approach. The company worked with ComplyAdvantage implementation consultants to define its data model and scope out the bespoke rules it wanted to build for transaction risk management. ComplyAdvantage used its industry expertise to help TransferMate achieve its goals, sharing ideas and best practices.

3. Strong industry knowledge

Some RegTech vendors will also specialize in supporting specific markets, such as digital banking or payments. Others have a broad suite of clients, with implementation and customer success teams dedicated to each. While both approaches can make for a successful business, firms should ensure their vendor has experience with relevant firms in their space. This will enable greater out-of-the-box thinking when solving inevitable challenges and roadblocks. It also empowers implementation teams to be proactive, offering creative solutions that help firms achieve their intended outcomes more quickly or efficiently than anticipated.

Hampshire Trust Bank (HTB), a United Kingdom (UK) specialist bank that provides business, mortgage, and development finance solutions, faces compliance challenges unique to its business model. By working with an experienced implementation team at ComplyAdvantage, the bank can, for example, examine how to optimize the application of its transaction monitoring rules for specific customer segments that may operate in particular ways.

4. Sandboxing and an iterative mindset

From day one of implementation, the most effective vendors will have a ‘test and iterate’ mindset. This should begin with a sandbox to enable integration to start immediately. A sandbox approach also means implementation can be phased, with deliverables ready to start immediately while work on other areas of the solution continues.

The intersection of implementation and customer success is also critical. Customer success managers will be their clients’ front-line representatives when explaining and working through the rollout of new vendor features or managing client requests for new capabilities. A knowledgeable and engaged customer success manager can also proactively recommend optimizations based on their experience working with other similar clients.

As Robin Jeffery, Head of Transformation at HTB, explained about working with ComplyAdvantage:

“Other products we reviewed on the market were more rigid. ComplyAdvantage enables us to focus on continual improvement, adapting the platform as we learn and as the world evolves.”

5. Agile to changing risks

It’s also important for firms to remember that implementation is not a ‘one-and-done’ process. Compliance decision-makers can evaluate a vendor’s ability to support changes over time as new risks emerge. Look for a firm that offers features such as the ability to quickly build new rules without needing to raise a time-consuming support ticket. Waiting for a vendor’s IT team to implement a change to risk thresholds, based, for example, on new information from law enforcement, could leave emerging financial crime risk undetected for weeks, or even months.

Overseas payments and foreign exchange provider Lumon found itself needing to react quickly during the early stages of the COVID-19 pandemic in 2020, when it saw a sudden increase in COVID-related investment fraud. “Within 48 hours of identifying this, Lumon developed and deployed new rule sets to combat the threat and prevent more customers from falling victim to scams,” explains Alessio Giorgi, the firm’s Head of Compliance and Money Laundering Reporting Officer (MLRO).