For the past few months, Mopso has been engaging in informal discussions with various anti-money laundering (AML) managers from Italian banks. We reached out to them via LinkedIn, extending beyond our direct contacts, whether they are clients or prospects. Our goal was to uncover common AML practices, daily challenges, and the human aspects of dissatisfaction in fighting what can sometimes seem like an uneven battle.
We asked numerous questions regarding the issue of suspicious activity reports (SAR), aiming to understand the tools currently used, their effectiveness, and delving into the analysis processes, timeframes, and main difficulties.
One of the main problems is the fragmentation of information sources used, often as separate services, opened in browser windows or distinct programs.
We encountered a significant openness to dialogue and a profound awareness of their daily challenges. Italian banks can boast competent and dedicated staff; perhaps, they deserve more cutting-edge tools.
What We've Learned so far
Identifying potential suspicious transactions is just the beginning; transaction monitoring systems generate alerts, but very often, the information is insufficient to understand their nature. Competence and experience become crucial for analysts in determining the necessary verifications. For instance, if a significant transfer has a cause related to a donation, retrieving the actual document becomes important. In cases of seemingly frequent national transfers, requesting invoices to verify traded goods, services, and prices may be useful. Differing evaluations between experts may arise, such as a small company spending half its revenue on consulting, raising suspicion for an experienced eye but going unnoticed for a newcomer in the field. Can we afford this difference in evaluations?
In smaller banks, the closure time for an SAR can be quite lengthy, even taking several days: partly because of the time clients need to provide the required documentation to understand the legitimacy of the transactions. Often, processes rely on spreadsheets rather than workflow software, lacking automatic alerts for analysts to monitor progress. Some processes are still paper-based, consuming more time.
One of the main problems is the fragmentation of information sources used, often as separate services, opened in browser windows or distinct programs. The AML function values various internal data sources: the registry, risk profile management, the ledger, and business registry data (also useful for credit scoring). The hunger for data in the AML process leads to different suppliers for bad news, politically exposed persons (PEP), terrorist lists, often requiring manual verification, in combination with information requests from investigative authorities. If the analyst has to open many windows, download documents in PDF, such as business records, the time grows rapidly: it is a common need, therefore, to have "dashboards," centralized management systems from which to access relevant information. It is less straightforward to understand how to build them, as it involves combining intuitive commands, heterogeneous data architectures, and different providers.
In large banks, it's not necessarily simpler; processes don't develop linearly. The registry, the bank's core, is used by dozens of different processes and software. It cannot be modified to meet the specific needs of a particular process like AML or to simplify the integration of a new data analysis system. Modifications must consider this environment with multiple dependencies. Hence, we developed a microservices architecture to reduce difficulties in adding features within intricate processes.
What We're Doing to Address Collected Needs
Our continuous verification solution, Brain, combines subjective information from banks and third-party sources, grouping them in a single space where our artificial intelligence algorithms operate. It can analyze transfers, incorporate alerts from other software, and promote an understanding of the operation's context, avoiding ineffective individual analyses. We're also conducting research activities with leading European partners in graph analysis to identify known money laundering patterns involving companies, individuals, and various operations over a sufficiently broad time frame.
Contact us at info@mopso.eu for a demo and to get to know us better.
Your Thoughts?
We'd like to expand this discussion to other AML managers, even those from different countries, to enrich our considerations and generalize them to various types of banking and financial institutions. Another burning topic is the customer due diligence, and we'll soon begin new interviews.
You can find us on Linkedin: Mopso Srl https://www.linkedin.com/company/mopso-srl/
Feel free to connect directly: Andrea Danielli | LinkedIn
Or, send an email to info@mopso.eu with the subject "AML Discussion," and we'll get back to you.