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Why AML-as-a-Service Marks the Next Evolution in Securing Regulatory Compliance

06/27/2022 by David Septoff Financial Crimes

Midway through 2022, the financial services sector continues to face a landscape upended by the past few years. An accelerated shift to digital-only on the part of consumers underscored the importance of faster, more flexible methods of storing and analyzing transaction data.

But technical advances that have revolutionized data management have had just as dramatic an impact on anti-money laundering (AML). Bad actors have been exploiting newly affordable hardware and software to conduct financial crimes. According to a UN report, money laundering equates to 2% to 5% of global GDP in a given year. Regulatory changes introduced by the 2020 Anti-Money Laundering Act have amplified the pressure to ensure your institution remains compliant.

Small- to midsize institutions face an uphill climb to keep pace with the constant threat of criminal activity. Finding an AML solution that’s up-to-date and suitable for your institution’s needs is both challenging and expensive. But the potential damage to your institution that results from neglecting AML is much more costly. Last year, regulators levied more than $2.7 billion in fines, including $390 million against Capital One. 

To protect your institution and its reputation, you need to think about AML differently. You need an AML-as-a-service (AMLaaS) solution. 

AML Is Not a One-Size-Fits-All Solution for Financial Institutions

The prevalence of today’s money laundering schemes has underscored the importance for institutions to undergo a digital transformation. Faced with innovative, complex criminal activity that incorporates international collaborations and machine learning, any AML strategy built on manual monitoring and spreadsheets will be overrun. The future of finance is in the cloud — and the same goes for AML.

As regulations have expanded to address a global problem, large institutions are more equipped to create custom, in-house AML solutions. Corporate giants like Bank of America can dedicate a wealth of resources toward creating a massive, on-prem solution. And they have the deep pockets to dedicate a team toward managing that solution and its transactions. Small- to midsize institutions don’t have that luxury.

Though you face the same threats and regulatory scrutiny as bigger banks, you don’t necessarily need a Cadillac-level system like theirs. You need an AML solution that’s robust but primarily resolves the business problem of ensuring the same level of compliance without the same investment.

SAS-powered AML-as-a-Service Delivers Peace of Mind at a Manageable Cost

A modern AML solution doesn’t have to break the bank. When you collaborate with a technology partner through an AML-as-a-Service program, you gain a proven solution scaled to your needs. But just as crucially, you don’t have to wait as long as 18 months after implementation to see the ROI from your efforts.

Whether you work at a regional bank, online gaming company, or insurance provider, your organization is responsible for setting up an AML solution and customizing it to your needs. Unfortunately, not only are professionals with the right skillset difficult to find, they also come at a high cost.

Then, you need an internal team to maintain your AML solution and ensure it is up-to-date with the latest requirements and updates. From initial investment to ongoing maintenance and support, your expenses continue to add up.   

AML-as-a-service introduces a more manageable level of investment. At Zencos, we’ve created a unique solution powered by SAS that doesn’t require a large-scale upfront investment. Our solution features an out-of-the-box library of rules covering most scenarios. Then, we customize its capabilities to satisfy compliance requirements specific to your region.

With an 80/20 solution at your fingertips, your institution gains a faster time to value. Instead of waiting over a year to see an ROI from your efforts, small- to midsize institutions can see a return in three to six months.

But just as importantly, you also gain valuable peace of mind. Once implementation is complete, the AML-as-a-service model transitions to a support arrangement.  Your team is trained and ready to run AML models, and you can contact us 24/7 for behind-the-scenes updates. Not only is your institution spared the burden of supporting your AML solution, but you avoid the associated costs as well.

The Right AML-as-a-Service Levels the Playing Field for Institutions

When deployed properly, AML-as-a-service effectively grants your institution the same capabilities as the big banks. Plus, our AMLaaS solution offers the flexibility to grow. Whether your goals change and you require additional features or new regulatory requirements, our solution is scalable for the future.

Thanks to our SAS partnership, we have a road map in place for your solution to evolve into a larger implementation as needed. But it’s not as if your institution is licensing a bare-bones AMLaaS system. Along with providing a baseline foundation for your AML needs, our solution features built-in analytics modules and case management capabilities.

With a rapid learning curve and seamless integration with outside data sources and third-party watchlists, Zencos AMLaaS allows your team to track down suspicious transactions in a way that’s faster and smarter.

Why Your Institution Can’t Wait to Upgrade its AML Solution

The fight against money laundering is hardly new in the financial sector. But since the pandemic, it has continued to expand and evolve at an increasingly rapid pace. To offset the risk of falling behind and the damaging repercussions of heavy fines, your institution needs to shift its thinking about AML.

As criminals grow more innovative and security risks multiply as a result of many people still working from home, you need a dramatic upgrade to your defenses. As we close out 2022, the threats and associated risks with using old processes to navigate an increasingly cutting-edge problem will only grow. It’s a turbulent time in the industry, but it’s business as usual for us. We’ve helped a wide variety of institutions enhance their processes and allow their teams to function at their best. Let’s talk about how a shift to an AMLaaS solution will enhance your team’s efforts while saving your organization time and money.