Implementing Cutting-Edge AML Software in the DNFBP Sector
Implementing Cutting-Edge AML Software in the DNFBP Sector
AML UAE guided the implementation of cutting-edge AML software for a business entity working in the Designated Non-Financial Business and Profession (DNFBP) sector in Dubai, UAE.
The client has an established business in the DNFBP sector and with the growth in business, the volume of AML/CFT compliance requirements including screening, KYC, CDD, and regulatory also increased. The most of the compliance processes were handled manually and they were time-consuming and inefficient.
Customer Goals:
Our client, a DNFBP sector entity, aimed to strengthen its anti-money laundering (AML) measures to comply with stringent regulatory requirements. Their primary objective was to enhance their overall ability to detect and prevent illicit financial activities, including ML/FT, and adopt efficient compliance processes while carrying out screening, KYC, CDD, customer risk assessment, and regulatory reporting.
Challenges:
As a DNFBP with a relatively smaller business and compliance team, the client faced several challenges in complying with its AML/CFT obligations. Some of the key challenges faced by clients were:
- Manual processes to handle KYC were inefficient, and it took too much time to obtain the required ID and address proof documents from the customers.
- Customer experience was hampered due to delays in onboarding.
- PDF-based KYC forms lacked the intelligence to carry out meaningful analysis
- Adhering to the ReKYC requirement was challenging, and many times, the due date was missed.
- There was no central database to meet record-keeping obligations mandated by the law.
- Customer Risk Assessment was Excel-based and error-prone.
- In the absence of a workflow mechanism, the entity had difficulty in meeting the 4-eyes review process.
Legal Background:
The DNFBP was governed by:
- Federal Decree Law No (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations
- Federal Decree Law No (26) of 2021 to amend certain provisions of Federal Decree Law No (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations
- Cabinet Decision No (10) of 2019 concerning the Executive Regulations of Federal Decree Law No (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations
- Guidelines for Designated Non-Financial Businesses and Professions (DNFBPs)
It is mandatory for all entities working in the DNFBP sector to comply with the regulatory framework governing AML compliance in the UAE. For this purpose and to combat ML/FT crimes, they need to implement robust measures.
In case the entity fails to adhere to the requirements of AML regulations, it faces severe penalties and fines, reputational damage, and even legal action. Therefore, the client recognised the urgent need to automate their manual AML/CFT compliance processes.
Solution Provided by AML UAE Team:
AML UAE worked with the client and documented the functional and non-functional requirements. From its vast experience in working with various RegTech solution providers, AML UAE identified the top 3 AML Software solutions to meet the client requirements. Extensive demonstrations took place, and the best-fit solution was identified and finalised.
During the AML Software implementation phase, AML UAE became the bridge between the client and the software vendor. It was instrumental in configuring various system parameters to ensure freedom in doing business and also adhering to the legal requirements.
The AML software came with various modules:
- Identify verification
- Screening
- Case management
- KYC and CDD
- Customer Risk Assessment
- Transaction monitoring
- Record-keeping
- Regulatory reporting
End Result:
With the implementation of the AML software, our client significantly strengthened its AML defences and regulatory compliance.
The AML software enabled them to analyse vast amounts of data rapidly, identify potential risks, and take proactive measures to mitigate them, which increased their efficiency by 45%.
Additionally, it took almost 50% less time for AML procedures as compared to when undertaking them manually.
The customer onboarding became smooth, and on average, it was completed in 3 days compared to 25 days.
The software selection guidance provided by AML UAE resulted in time and cost savings and enhanced AML compliance capabilities.
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