Best Practices for Customising AML Software Notifications
Best Practices for Customising AML Software Notifications
Anti-money laundering (AML) software is a strategic tool that helps businesses meet their AML compliance obligations effectively. An important feature of AML software is its notification system. Notifications alerts businesses to potential money laundering (ML), terrorism financing (TF) or proliferation financing (PF) risks, pending tasks approaching deadlines, action required on incomplete tasks, etc. Customising these notifications improves the efficiency of the AML software. This infographic lists best practices for customising AML software notifications.
Dos of Customising Notifications of your AML Software
Prioritise Relevance:
Priority should be given to notifications that alert users about high-risk transactions or activities that indicates ML, TF or PF risks. On the other hand, tasks which are routine can be given low priority. For example, a perfect sanctions screening match found should be considered high priority task that needs immediate attention while potential matches can be assigned medium priority.
Align Notifications with Risk Profiles:
Businesses conduct Customer Risk Assessment (CRA) as part of their AML program and create risk profiles for customers. Customising notifications to reflect these profiles, ensures that ML, TF and PF risks associated with high-risk customers are closely monitored and addressed.
Use Clear and Actionable Language:
Notifications should be framed in clear and actionable language. It should communicate to the user the nature of the alert and the action that needs to be taken by the user.
Test and Validate:
Before adopting customised notifications, businesses should test and validate the system to make sure that it functions properly. Any issues identified during this testing phase should be addressed to make the notifications system robust.
Segment notification according to user decision-making capability and workflow:
Notifications should be segmented and customised according to the role and decision-making capability of the users involved in the AML program of the business. For example, a Money Laundering Reporting Officer is in charge of making decisions regarding suspicious activities and reporting through the goAML portal.
Therefore, the MLRO should receive relevant notifications regarding any suspicious activity that necessitates the filing of Suspicious Activity Reports or Suspicious Transaction Reports. On the other hand, frontline staff do not have such a role, and therefore they need not be sent such notifications. However, such suspicious behaviour and customer activities must be listed as red flags, and they should be included in the AML/CFT training.
Automate Escalations:
Automating escalations can help ensure that important alerts are prioritised and not missed. AML software should automatically escalate priority notifications to make sure that action is taken to resolve the notifications on time.
Set Time-Based Thresholds:
Notifications should be set to ensure that any deadlines or periodic tasks related to AML compliance are not missed. Time-based thresholds should also be set to detect and alert the users of any activities or transactions conducted after normal business hours that may indicate MT, TF of PF risks, or require immediate attention.
Set Real-Time Notifications for Critical Alerts:
For high-risk issues, real-time notifications should be in place. For example, a high-risk situation such as a name match in sanctions screening requires immediate action including filing Fund Freeze Report. Real time alerts enable quick decisions to be taken on these issues.
Consider jurisdictional requirements:
AML regulations are different for different jurisdictions. Customising notifications to comply with jurisdictional AML regulatory obligations ensures effective AML compliance.
Regularly Review and Adjust Settings:
The system of notifications should be reviewed on a regular basis to ensure its effectiveness. Any gaps found should be filled through appropriate change in settings. Feedback from the users should also be taken and incorporated into the notification system.
Don'ts of Customising Notifications of your AML Software
Don’t ignore user preferences and capabilities:
Notifications should be customised to the user role in the AML program of a business, ignoring this leads to confusion and ignoring of tasks due to excessive notifications.
Don’t configure alerts too close or too distant from upcoming document expiry:
Setting alert too close to an upcoming document expiry can create panic among users, while alerts set too distant from the deadline may be ignored. Adequate time should be allotted to ensure that users can work on the tasks effectively.
Don’t create ambiguity about accountability by notifying all users at the same time:
Notifications should be role specific. If all users are notified about all tasks, this will result in confusion and ignoring of tasks leading to mismanagement of AML compliance without any accountability with respect to successful completion of tasks.
Don’t Neglect Ongoing Adjustments:
Notifications should be re-customised whenever there is change in AML compliance obligations, business operations, products and services, etc. For example, if the time period for record-keeping requirements under AML law changes, notifications for time thresholds should be changed accordingly.
Don’t Use Generic Notifications:
Tailoring notifications to the needs of the user ensures that the alerts are properly addressed.
Don’t Ignore False Positives:
Every false positive should be reviewed and fine-tuning of the AML software should be done to minimise the future possibility of such false positives. This ensures that genuine alerts are not missed.
Don’t Forget to Train Your Team:
The users of the AML software, that is, the staff of the business involved in AML compliance should be trained to understand the working of the AML software and its notifications system. This enables them to perform their role in AML compliance effectively.
Don’t Overload Users with Excessive Alerts:
Numerous notifications can confuse the users as to their role in resolving the notification and lead to important alerts being missed or ignored.
Conclusion
Customising AML software notifications is important for improving the usability of AML software and ensuring comprehensive AML compliance. By adopting the dos and don’ts discussed in the infographic, businesses can customise their notifications effectively and prevent the missing of any ML, TF, or PF threats.