A Guide to Anti-Money Laundering for Crypto Firms

Assess customer risks dynamically with self-serve rules builder for transaction monitoring

Transaction Monitoring Knowledge & Training

Financial crime typologies are evolving at pace. This shift is putting pressure on the transaction monitoring rule sets compliance teams use to help detect and prevent criminal behavior. 

For example, a recent report by ComplyAdvantage and the FinTech FinCrime Exchange found soaring levels of concern about smurfing and money muling. Yet asked if they felt confident in their firms’ ability to identify and mitigate attempts at smurfing, 77% answered only ‘Yes – for the most part’. This suggests there are potential gaps and weaknesses in current approaches, including transaction monitoring rules. 

As a baseline, the report highlighted the three foundational categories of an effective transaction monitoring system:

  1. Value: The overall value of funds transferred over a specific time period 
  2. Volume: The overall number of transactions in a given time period 
  3. Velocity: Rules designed to identify rapid movement of funds, typically over a shorter period of time than volume focussed rules

But with typologies changing rapidly and many firms – especially FinTechs – faced with large volumes of customer data to structure and process, how can compliance teams achieve the dynamic risk scoring they need to stay ahead of emerging risks?

Developing effective rules can also be difficult and labor-intensive. In some instances, firms may have to rely on template-based rules built by their vendor, which are highly restrictive and risk generating higher volumes of alerts. 

That’s why ComplyAdvantage offers a self-serve rules builder platform for its customers. This means compliance teams are able to create their own efficient and complex rules without writing any code. They can also test them in a sandbox before deployment, following a robust approval process. Defined roles and permissions for rule editors and approvers are included. 

Customers also have access to an in-house team of rule specialists who work on the construction and optimization of rules for businesses across the financial services industry. They bring their expertise on variations in a dynamic range of typologies to their work. Such experience can compliment internal rule building teams, delivering an effective ongoing partnership. Where firms don’t yet have rule building expertise in-house, support from ComplyAdvantage can serve as a valuable alternative. 

In addition, customers can search and add specific risk-related rules from a categorized library aligned to AML/CFT industry risk typologies. 

The benefits of this approach for compliance analysts include:

  • View rules by status – Analysts can now see and understand their live rules, and how these have been applied across different segments using a risk-based approach 
  • Edit existing rules – The autonomy to respond quickly to specific scenarios and continually improve their systems
  • Flexible risk thresholds – Focus only on genuinely suspicious activity by setting different alert thresholds and treatments across a range of risk-based segments
  • Fill coverage gaps – Meet evolving business needs without the need to design a new rule logic, and build custom rules where standard rule libraries don’t address a specific risk

Success story: Multipass

Multipass, a multi-currency business account designed for managing international bank transfers, has improved its compliance processes through using ComplyAdvantage’s rules builder. 

“The ability to see the details and conditions of each rule gives us a much better understanding of our performance,” said Anastasija Marusjaka, Senior Compliance Analyst. She added that “we can do this independently and understand the reason why alerts trigger, and how we can improve our system.”

“The best thing about ComplyAdvantage’s rules builder is that there is the ability to use previous data and create new rules. This helps me understand our rules and improve them. Day by day, we get better.”

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Originally published May 24, 2022, updated May 24, 2022

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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