What is anti money laundering compliance software and how does it work?
The National Crime Agency estimates that the value of money laundered in the UK is between £36bn and £90bn. In our industry, it’s something we need not only to be aware of but to take precautions to prevent.
Read on to discover what anti money laundering compliance software is all about, why it’s needed, how it works, and how to get started.
Understanding Anti Money Laundering (AML)
Money laundering is a crime. Here, money obtained by criminal proceeds (such as terrorist funding or drug trafficking) is disguised to make it look like it has come from a legitimate source.
Anti money laundering (AML) regulations are designed to prevent this from happening. They reduce the likelihood that profits from crime can be hidden.
Businesses are required to comply with these regulations to help prevent economic crime and money laundering. Without complying, some businesses may be issued with financial penalties – and may even be disqualified from operating.
Anti money laundering compliance software can make this task far less complex.
Necessity of AML Compliance Software
Accountants may face several challenges when undertaking AML compliance processes manually.
The first is the issue of resource: not just in terms of available time, but also in terms of having the right skilled professionals with the right expertise in AML compliance. They must also have the right tools at their disposal to identify any suspicious activity.
Regulatory changes can also make AML compliance processes challenging. Because regulations are constantly changing – and because rules are different in different countries – accountants may find it hard to ensure that they are completely up-to-date.
Manual processes can be inefficient and outdated, and it can be hard to ensure that data coverage is both comprehensive and accurate. What’s more, the need for ongoing monitoring of transactions, risk profiles and behaviour can put a great deal of strain on your business.
All of these factors demonstrate why anti money laundering compliance software is so important in our sector.
How Anti Money Laundering Compliance Software Works
There are normally four main areas that anti money laundering compliance software can cover:
Name screening. Software can be used to identify individuals who have been sanctioned in certain territories and flag these to you. It can also identify other types of individual, such as those receiving negative media attention, or those who are politically exposed.
Monitoring transactions. AML compliance software can identify suspicious transaction patterns, taking into account both recent and historic transactions.
Currency Transaction Reporting (CTR). Any transactions that involve large quantities of cash – or multiple, smaller transactions that add up to a large value, can be flagged automatically.
Compliance. Such software can be used to keep you compliant on a day-to-day basis when it comes to anti money laundering regulations.
When choosing anti money laundering compliance software providers, you will be provided with information on how to get the software up and running. However, there are also third parties you can turn to for help should you need assistance.
Benefits of Using AML Compliance Software
Criminal activity continues to rise, and using AML compliance software makes it easier for you to play your part in reducing it – as well as ensuring that you can adhere to the required regulatory standards.
Scanning data and records manually can be challenging. It is easy to make errors or miss things, and it takes time to use up resources that could be better used elsewhere. What’s more, if your competitors are using AML compliance software, you’ll find yourself on the back foot.
Using such software makes it easier to spot issues more quickly and aids in helping government agencies identify issues before they grow.
Why Join the ICPA for AML Compliance Solutions
Among the many benefits included in ICPA membership is access to anti money laundering compliance software. Our all-in-one compliance, educational and risk management solution for accountancy practices offers full protection from money laundering exposure and comes with an AML policy that fulfils all of your practice’s requirements.
What’s more, you need not go it alone. At the ICPA, we provide all of our members with the expertise and support they need to get the software up and running with ease so that you can be safe in the knowledge that your AML compliance processes are up to scratch.
For robust AML compliance solutions – and a whole host of other benefits – join ICPA today.
FAQs on Anti Money Laundering Compliance Software
Still got questions about anti money laundering compliance software? Take a look through our FAQs – or contact us if we can help further.
What is Anti Money Laundering (AML) compliance software?
AML compliance software is software that helps you detect potential evidence of money laundering, fraud, or terrorist financing.
Why is AML compliance software essential for accounting firms?
Accounting firms are required to report any suspicious activity that could indicate money laundering. AML compliance software makes this easier.
How does AML compliance software help in adhering to regulatory requirements?
Rather than check manually for evidence of money laundering, this software can automate the process, saving you time, money and the risk of error.
What are the key features of an AML compliance software?
These vary depending on the specific software you choose, but may include automated Know Your Customer checks, transaction monitoring, AML risk assessment and monitoring and more.
Is AML compliance software a legal requirement for accountants in the UK?
AML compliance software is not a legal requirement, but AML compliance is. Using software rather than manual processes can improve efficiency.
How does AML compliance software improve efficiency in accounting practices?
Scanning data and records manually can be challenging. It can be easy to miss things or make mistakes, as well as take a great deal of time. AML compliance software can prevent these things from happening.
Can AML compliance software be integrated with other accounting software?
Yes – which means that you will be able to run checks using data from the software you already use.
How does AML compliance software help in reporting and auditing?
AML compliance software reduces the need for manual reporting and auditing, saving you time and resources and ensuring accuracy.
How does AML compliance software keep up with changes in legislation and regulations?
AML compliance software is updated as regulations and legislation change, giving you peace of mind.
How do I ensure that the AML compliance software complies with GDPR?
Legitimate AML compliance software providers will have GDPR policies that confirm that they comply. Always check these policies before you sign on the dotted line.
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