Insights

6 March 2024

The 4 things AML teams must focus on in 2024

A staggering $3.1 trillion in illicit funds made its way through the global financial system in 2023, according to Nasdaq Verafin’s 2024 Global Financial Crime Report—and that’s only what is reported. As criminals utilize new tech, AML teams are facing an increasingly savvy enemy that is wise to defense tactics.

Is it a losing battle, or can AML teams gain the upper hand?

MBK Search’s Michael Oliver sat down with Senior AML Product Expert at Nasdaq Verafin Corey Lynch to discuss the challenge. These are four key takeaways for firms:


1. Embracing Technology and Automation

Financial institutions can’t expect an aging tech stack to fight modern fin-crime. Legacy systems and manual processes are more likely to inhibit an AML department’s efforts than assist them.

Lynch suggests that “technology can fundamentally take everything you do, move it into a more cohesive system, and allow you to combat the criminals.” By leveraging robotic process automation and generative AI, investigators can focus on more complex, targeted typologies rather than getting bogged down in routine tasks.

2. Collaborating and Sharing Intelligence

Effective collaboration and information sharing among financial institutions, law enforcement, and regulators is crucial in the fight against financial crime.

Lynch highlights the importance of moving away from siloed systems and working together more cohesively, stating that “the criminals themselves [have] been exploiting the interconnected nature of the financial system forever. That’s why they’ve been successful. Whereas the industry itself, we’ve been reticent to adopt frameworks where we can collaborate.”

By utilizing tools like adverse incident databases, counterparty analysis, and platforms for secure information sharing, institutions can build a mutual understanding of threats while protecting customer data.

3. Aligning with National Priorities

Over the next 3 to 5 years, Lynch sees the AML world focusing on aligning with national priorities and developing targeted typologies for predicate crimes such as terrorist financing, fentanyl trafficking, and sextortion. He emphasizes the importance of “incorporating the technology and the processes we need to ensure that we’re aligning with the national priorities themselves.” By automating routine compliance processes, institutions can funnel the expertise of their investigators into these critical areas.

4. Measuring Effectiveness and Improving Feedback Loops

Measuring the effectiveness of AML efforts remains a challenge, but Lynch suggests focusing on creating efficient and effective systems that allow investigators to spend time reporting the most important crimes.

Improving feedback loops between institutions, law enforcement, and regulators is also crucial.

Lynch notes, “For you to have some type of mechanism that allows for feedback on what was good, what was bad, what was useful and what isn’t, that has to be there.” By understanding what makes a valid SAR or piece of information, institutions can refine their typologies and significantly impact the fight against financial crime.

As the battle against financial crime evolves, AML professionals must stay informed and adaptable. Institutions can create more efficient and effective risk-based programs by focusing on human impact, embracing technology, collaborating effectively, aligning with priorities, and improving feedback loops.

Watch the full webinar with Corey Lynch here:

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