What Is AML Screening?

Over the past few years, more and more countries have begun investing in anti-money-laundering (AML) efforts. Many national governments have passed initiatives mandating how companies must approach AML efforts.

One such component of new AML regulations is “AML Screening.” If you’re a company who needs to meet AML compliance measures, screening is one of the most vital things you’ll need to know about. Below, we’ve provided a brief overview of what AML Screening is and how it can impact your KYC efforts.

Describing AML Screening

AML Screening, perhaps otherwise known as Customer Screening, is the act of reviewing customers before allowing them to engage in a transaction. Typically, it most impacts financial institutions, although it can affect other companies as well. The purpose of AML screening is to reduce the likelihood of:

• Terrorist financing

• Money laundering

• The funding of other illegal activity

Is AML Screening Necessary?

When it comes to anti-money-laundering compliance, screening is one of the most critical components. Screening ensures that customers are who they say they are. Accordingly, it’s necessary for two reasons.

One, it’s necessary because many national governments mandate it. For instance, some AML initiatives require financial institutions to communicate with one another through a database, sharing information about potential customers. This is done to help reduce the risk of fraudulent activity.

Second, AML screening can help keep companies safe. Not only is it necessary required by law, but investing in quality AML screening methods could help protect a company’s financial assets.

Problems With AML Screening

As companies have attempted to invest in AML screening, they’ve begun to realize a few problems. First and foremost, one of the challenges that companies face is on-boarding time. Companies need to screen customers in “real time.” They need results in 24 hours or less.

Unfortunately, have companies have attempted to keep up their AML screening efforts, they’re finding it challenging to receive results in real time. The on-boarding and screening process then slows them down, interfering with their business.

Secondly, many companies struggle with “over-screening.” Because their systems are outdated, they request information that isn’t entirely necessary for the screening process. As a result, it takes them longer to onboard customers. The worst part about this is that the slowdown occurs due to information that isn’t even relevant. Companies must make sure that they’re asking companies for essential information during the screening process.

Lastly, one of the other significant problems with modern screening processes is that there are risks of errors. Many companies have individuals hand-review documents and enter information into a database. When doing so, there’s a strong chance that something is overlooked. AML screening is pointless if it’s not going to be efficient and accurate.

Ways To Update AML Screening Measures

No matter if your government is making you abide by AML screening regulations or you’re merely looking to help keep your company safe, it could be in your best interest to invest in new AML screening measures. Fortunately, today’s modern systems are geared explicitly to ensuring that you remain compliant with local regulations.

Today’ AML screening measures rely on deep-rooted algorithms and AI to ensure accuracy. Companies can trust that the information they receive is accurate and that no one has slipped through the cracks. Many AML screening systems will red flag those customers who could potentially engage in fraudulent activity. From there, an individual could dive deeper into the person’s file and likely ask for more information.  

Additionally, because today’s AML screening systems are automated, they can provide answers in real-time. No longer will companies need to request to see pieces of paper and then send this information to a third-party company. So long as the individual has a cell phone, screening measures can take place instantly.

This is primarily thanks to the fact that today’s smartphones come with dual cameras. You may use these cameras to take stunning photos in “Portrait Mode.” However, you likely don’t realize that these cameras also allow companies to scan IDs and other documents. The dual cameras excel at picking up holograms and watermarks, making them a viable tool for AML screening.

So, all customers have to do is take a photo of their ID. Algorithms will then begin working instantly to determine if the person on the photo in the ID is legitimate. You’ll also likely require the customer to take a picture of their face to ensure that it matches the photo on the ID. Today’s AML screening measures can pick up on the slightest of inconsistencies, helping to ensure correct screening methods.

Update Your AML Screening Efforts Today

No matter if you need to update your AML screening efforts because you’re mandated to do so, or would like to update them to help keep your company safe, AU10Tix is here to help you.

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