What is an AML analyst?

By Colin Bristow, Principal Pre/Post-Sales Systems Engineer, CFS Pre Sales Support

An Anti-Money Laundering (AML) analyst - sometimes referred to as an investigator - essentially monitors and investigates suspicious financial activity. Typically empowered with an end-to-end anti-money laundering solution or software, AML analysts can use digital tools to better understand financial transactions and identify trends.

Sorting the 'legitimate' transactions from the 'bad' can be a major challenge for financial firms, which is why investment in the technology required to support AML analysts is the key to efficient and effective detection and investigation.

Why it's time to support your AML analysts

The impact of not having these tools or a comprehensive AML analysis process is terribly apparent. Despite having "appropriate measures" in place, for four years, major British banks unknowingly processed hundreds of millions of pounds believed to be linked to criminals and corrupt officials. Evidence obtained by the UK Government indicated that several of the UK’s biggest banks were involved in processing money from a Russian scam, believed to involve upto $80bn (£65bn). Although a small portion of that amount was routed through UK banks, £600m, the report indicates that it was done through 1,920 transactions, highlighting that more needs to be done to identify illegitimate transactions.

Despite this being what AML analysts are brought in to prevent, money laundering continues to be a huge problem for financial institutions and governments across the world. Estimates suggest that global money laundering transactions are about 2 to 5% of global GDP, roughly $1-2 trillion annually.

Monitoring and identifying illegitimate transactions manually is becoming more and more difficult for financial firms, but there is a solution: a combination of sophisticated transaction monitoring tools and effective AML analysts.

What does an AML analyst do?

The AML analyst role can be diverse, including investigation of cases highlighted by, typically, a transaction monitoring system; but roles can also extend to include system tuning / improvement.

What AML analysts are routinely required to explain to regulators, examiners and auditors are their strategies for monitoring and prioritising risks. AML analysts must know their clients inside out, document information on clients using a variety of research sources, liaise with compliance teams on specific requirements and review data to ensure AML regulations are met.

Advanced analytics continue to support AML compliance processes: final decisions require human intervention, and AML analysts form a key part of the compliance process for the firm.

What skills make an exceptional AML analyst?

Complete understanding of the firm’s business

Good AML analysts have typically worked in multiple parts of the business. They have a great understanding of the firm’s products and services; and understand transaction types, including the typical customer level interactions.

Excellent communication skills

An AML analyst must know the firm’s business well enough, and also be supported by appropriate systems and infrastructure, to allow detection and presentation of suspicious cases. This is particularly important if they are involved in tuning existing systems or scenarios.

The ability to work together with multiple compliance teams and interpret regulations

A big part of what an AML analyst does is supporting multiple compliance teams with the interpretation of regulations and meeting requirements driven by external and internal parties. This can include assisting on changes in regulations, modifying the transaction monitoring system to reflect those changes, through to highlighting the implications of new products or services, as well as the possible issues from a compliance perspective.

Consistency and insight

As more information is presented to AML analysts, it is essential to be able to consistently interpret and assess the details for risk. A standardised approach to evaluating risk not only considers activities such as KYC (Know your customer), but also understanding the details being presented in terms of AML risks. If AML analysts are using differing methods of investigation, it becomes difficult to explain and validate cases objectively.

Can interpret new compliance requirements

Continuing development of new regulations mean that AML analysts need to be able to understand and apply those to existing systems. At a high level, this can be supporting the creation of additional scenarios for monitoring purposes through to the definition of investigation processes.

A comprehensive understanding of data sources

Legacy data from differing sources/systems can be vital to building a comprehensive profile of client activities to allow transactional risk assessment. In some instances, transaction monitoring systems may not have all elements of data provided on a scheduled basis. Missing data could mean the difference between identifying a case of money laundering or failing to flag it. Understanding where to identify additional data within existing systems, and integrate it into their investigation processes is a key AML analyst role.

Supporting AML Analysts with technology

In order to develop a comprehensive, firm-wide strategy in relation to fraud and money laundering, financial firms need to invest more into sophisticated fraud detection, anti-money laundering solutions and AML analysts. Technology plays a key part in the data collation and assessment process, but it is up to the AML analyst to validate that information in light of compliance regulations.

investigative policing

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