The Role of AML Case Management Software in AML Compliance

RapidAML Team

2024-06-18

In this blog, we will explore how AML compliance is made more efficient, comprehensive, and optimised through AML Case Management Software. AML Case Management tool is one such solution that facilitates regulated entities to have a comprehensive overview of customer profile, AML compliance tasks, risk assessments, ML, TF, and PF alerts, case creation and investigation of alerts, etc., all in one place.

To protect their economies from threats of Money Laundering (ML), Terrorism Financing (TF), and Proliferation Financing (PF), countries have established their Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Counter-Proliferation Financing (CPF) laws. These AML/CFT/CPF laws require regulated entities to adhere to strict compliance measures.

AML Software solutions are one of the most recommended tools for regulated entities to meet their AML compliance requirements and mitigate ML/TF and PF risks effectively.

What Is AML Case Management

AML Case Management helps track, investigate, and report potential breaches and financial crimes. Case management eases AML compliance by consolidating information related to the customer on a single screen.

AML Case Management Software also alerts the user if any red flags indicating ML/TF, and PF risks are found or if any tasks need to be completed or escalated. Powered with a customisable ML/TF and PF detection system and machine learning abilities, it continually tracks exceptions and provides alerts and notifications. It also enables collaboration and coordination among the staff members of the entity who have different AML compliance roles.

Such a comprehensive overview enables regulated entities to effectively manage their AML compliance requirements and customer lifecycle right from the customer onboarding stage to the completion of business and make informed decisions regarding business relationships with the customers.

Features of AML Case Management Software

AML Case Management Software provides a range of features designed to optimise and streamline AML compliance processes. These features include the following:

Alert Generation and Prioritisation: AML Case Management Software enables the generation of alerts whenever ML/TF and PF risks are detected as per the detection rules and criteria set by the user. These risks may include the following:
- Sanctions screening match found
- Abnormal transaction patterns
- Other suspicious activities

Since AML Case Management Software consolidates all information related to the customer on a single screen, these alerts can be investigated with ease. AML Case Management Software also prioritises alerts based on urgency and shows the progress related to resolving the alerts. This helps create an AML audit trail for later review.

All alerts generated are visible through the customisable dashboard, with their priority or urgency indicated.

Case Creation: Case Management software helps create manual and automated cases. Anyone from the compliance team or the frontline employees can create cases when they have any type of suspicion as to money laundering, terrorist financing, or proliferation financing. Further, the cases can also be created in cases when the customer ID documents have expired, reKYC is needed, or customers and their transactions require further investigation.

Case Assignment: Users can assign the case created to the relevant personnel or staff, tasked with investigating the alerts. The staff or personnel can then reassign to other personnel, or departments according to the internal process for resolving the alerts. It can also be assigned to Senior Management if their approval or sign-off is necessary for onboarding high-risk customers. For example, in many countries, Senior Management approval is required before onboarding a Politically Exposed Person (PEP) as a customer.
Case Investigation: The assigned staff can work on resolving the alert based on a pre-defined, uniform, and customised workflow to be followed during the investigation process. All items in the checklist, and stages of completion of case, are indicated in the case dashboard for easy navigation. While investigating, analysts can also upload relevant documents or add their own notes and pointers to record their reasoning for later review. If the investigation leads to the conclusion that a regulatory report needs to be filed, all relevant information required can be easily found in the investigation files.
Centralised Case Management: AML Case Management Software integrates all information related to the customer and the progress of AML compliance tasks on a single screen for seamless navigation. When red flags are detected and alerts generated, all cases created to resolve the alerts are also available to be viewed in a consolidated manner, providing the user with an overview of the progress on resolving the cases, a list of high-priority tasks requiring immediate attention, the staff assigned to resolve the tasks, the deadline for the tasks, etc.
Integration with Other AML Tools: AML Case Management Software when integrated with other AML software tools such as Know Your Customer (KYC) Software, Customer Due Diligence (CDD) Software, Customer Risk Assessment (CRA) results, etc., provides a centralised view of the state of the compliance affairs.
Analytics: AML Case Management Software that is integrated with machine learning, artificial intelligence, and data analytics tools helps understand the efficacy of the compliance function. It can track the case status as per pre-defined Turn-Around Time (TAT) and provide reports on overdue tasks, cycle time, and other relevant analytics helping regulated entities to achieve excellence in AML compliance.
Documentation: All documents related to AML compliance tasks, such as CDD, KYC, Name Screening, etc., need to be maintained as per regulatory requirements. AML Case Management Software ensures efficient record-keeping. Whenever an alert is generated and a case is created and investigated, AML Case Management Software keeps all documentation related to the case investigation as well, enabling informed decision-making, easy regulatory reporting, and an audit trail for later review.
Regulatory Reporting: After completion of investigation, AML Case Management also assists in regulatory reporting. Suspicious activities and transactions indicating ML, TF, and PF need to be mandatorily reported to the regulatory authorities.

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Refer to the table below, which explains how a “case file” moves from one personnel to another, from customer-facing staff to AML compliance officer or Money Laundering Reporting Officer (MLRO) to senior management, if needed.

Title Convergence of AML Case Management Software Features with AML Compliance Process
Sr. No.	Case Management Software Features	Point of Intersection Where Case Management Software Features and Functionalities Meet and Fulfil AML Compliance Needs	Usual Sequence of AML Compliance Process
1	Alert Generation and Prioritisation	Scenario and Point of Convergence: Regulated entities can make use of case management software to track and prioritise alerts and cases.	Regulated Entities need to have clarity of its regulatory reporting and investigating requirements. It needs to configure case management software in such a way that high-priority alerts are brought to the attention of the compliance officer immediately. Medium and low priority alerts and notifications can be routed to other compliance team members to act upon and based on their investigation, they can further be routed to the compliance officer for his final decision.
2	Case Creation	Scenario: A front-desk personnel is suspicious about a customer based on his questions related to the KYC and CDD process. The front office person can create a manual case based on the identifier details available for further action by the compliance officer. Point of Convergence: Data entry of Key Identifier details belonging to the prospective customer into the Case Management Software results in case creation marking the beginning of the investigation on a customer.	Red flags identification and internal Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR).
3	Case Assignment	Scenario and Point of Convergence: Once case creation is complete, cases are assigned to various personnel enabling them to carry out their roles and responsibilities tailored around fulfilment of AML compliance process, such as: The front-desk personnel assigns the “case” to the Screening Analyst for carrying out Sanctions Screening, PEP check, and adverse media checks. Upon completion of sanctions screening formalities, the screening analyst assigns the case file to the KYC Analyst for fulfilling remaining CDD requirements. Depending upon the outcome of CDD process the KYC analyst may further escalate or assign the case to the AML Compliance Officer or MLRO for further investigation. The AML Compliance Officer or MLRO may assign the case to the Senior Management or may move the case for regulatory reporting as the situation demands. Note: A well-designed Case Management software provides the functionality to alter or calibrate users for case assignment according to workflows and requirement of a regulated entity. For instance, if it’s a one-person business, where the owner themselves carries out onboarding, screening, compliance, and reporting function then the case assignment functionality is adjusted by the software provider to cater to all functions of a case management software through a single login or user, which is of the sole proprietor. In contrast, when a regulated entity has a full-fledged workflow with a front desk, screening and KYC analysts, and AML compliance team the case management software with facility to create user profiles according to roles and workflows of the regulated entity is a must-have for smooth operations.	Role-specific AML Compliance tasks are carried out to ensure regulatory compliance Screening Analyst Sanctions Screening Politically Exposed Person (PEP) Checks Negative News or Adverse Media Screening KYC Analyst AML Compliance Officer or Money Laundering Reporting Officer (MLRO) Senior Management
4	Case Investigation	Scenario: While carrying out CDD of prospective and existing customers during ongoing monitoring of business relationships several reports are generated such as follows: Screening Reports Screening Matches Disambiguation PEP Risk Investigation Adverse Media Findings Analysis Reports by KYC Analysts, etc., indicating change in customer profile or details or change n nature of business These reports need thorough investigation by the AML Compliance Officer or MLRO within the regulated entity to ascertain whether any such reports or findings require regulatory reporting such as suspicious activity reports. Point of Convergence: A case management software helps with case investigation as and when required by generating alerts to relevant personnel according to parameters set for generating alerts indicating suspicious activities, screening or sanction match alerts, transactions monitoring alerts, etc. A well-designed case management solution also helps with assigning cases to relevant personnel such as the AML compliance officer or MLRO as and when system generate an alert for any discrepancy or anomaly indicating ML/FT and PF.	The AML Compliance Officer or MLRO need to investigate or dig deeper whenever any element of suspicion is found regarding possible involvement of a customer with ML/FT and PF activities.
5	Centralised Case Management	Scenario and Point of Convergence: A regulated entity requires a solution where all its AML compliance workflows can be accessed and assigned according to requirement to specific personnel responsible for screening, CDD, investigation, reporting, etc. An AML case management software helps regulated entity to have a consolidated view of its AML controls and measures by providing a centralised dashboard from where all the AML compliance processes such as screening, CDD/KYC, transaction monitoring, regulatory reporting can be accessed.	Regulated Entities need to have in place streamlined AML compliance controls and measures so that relevant staff or personnel can fulfil their specific roles and responsibilities.
6	Integration with Other AML Tools	Scenario and Point of Convergence: AML Compliance software provides a consolidated view of the entity’s compliance effort. Creation and disposition of alerts and cases, audit trail, document management, workflow, etc., working in tandem with screening, KYC, and customer risk assessment modules helps entities remain compliance with legal obligations.	Ensuring overall AML Compliance encompassing all the AML processes.
7	Analytics	Scenario and Point of Convergence: The regulated entity using case management software can make use of the analytics function of the case management software that deploys machine learning to track, assign, and investigate suspicious cases and reduce time wastage and achieve a high-degree of performance.	Top management and compliance officer can know the average time taken to investigate and complete a case and decide on resource and budget allocation to mitigate ML/TF, and PF risks.
8	Documentation	Scenario and Point of Convergence: AML recordkeeping is regulatory compliance requirement that regulated entities are required to fulfil. AML case management software helps regulated entities store and access their AML compliance measures for time period agreed upon or decided upon in the contract with the case management software vendor.	Case management software generates an audit trail of compliance effort which helps entities showcase the amount of due diligence carried out by them to meet regulatory requirements.
9	Regulatory Reporting	Scenario and Point of Convergence: AML laws require regulated entities to fulfil reporting of designated transactions, suspicious activities and transactions, etc., which is made easy by having a place an AML case management software that provides consolidated view of reporting requirements or alerts which may need to be investigated to identify if such alert requires to be reported to the regulatory authority in that jurisdiction.	Filing reports according to the requirement such as: Submitting Screening Report of matches found Reporting of suspicious activities and transactions Reporting of transactions exceeding pre-defined reporting thresholds, etc.

Benefits of AML Case Management Software

Efficiency: Due to automation of repetitive tasks, or tasks that require analysis of huge amounts of data, AML Case Management Software enables analysts to concentrate on high priority tasks that need to be immediately resolved. This improves efficiency in overall AML compliance and ensures that all compliance tasks are completed on time.
Accuracy: Through machine learning, data analysis, and other smart technologies, the issues of false positives is reduced, improving accuracy. Whenever an alert is created, the user is provided with relevant and detailed context for the alert, allowing them to analyse the alerts and make informed decisions in a swift manner.
Ensures Regulatory Compliance: By automating AML compliance, maintaining up-to-date records, robust ML, TF, and PF detection system, and case investigation workflow, AML case management Software ensures that entities remain compliant with regulatory requirements. AML Case Management Software’s proactive approach minimises the risk of non-compliance and penalties.
Record-Keeping: Effective record-keeping is important for meeting AML regulatory requirements. AML Case Management Software provides documentation capabilities, ensuring that all actions taken for AML compliance and during investigations are accurately recorded.
Integration with KYC: Know Your Customer (KYC) is a mandatory AML compliance task which involves identification and verification of a customer’s identity. KYC is integrated with AML Case Management Software and data collected through the KYC process and exceptions if any are reflected in the customer’s profile in the AML Case Management Software. This provides a complete picture regarding the progress of KYC tasks and the information collected during the KYC process on a single screen.
Integration with Sanctions Screening: AML Case Management Software integrates with sanctions screening tools, allowing for real-time screening against local and international sanctions lists, alerts generation if a match is found, case investigation and assistance with regulatory reporting.
Integration with Risk Assessment: AML Case Management Software is integrated with both Enterprise-wide Risk Assessment and Customer Risk Assessments. It helps entities take a risk-based approach and prioritise alerts having higher impact related to ML, TF, or PF.
Integration with Transaction Monitoring: AML Case Management Software has the functionality of integration with transaction monitoring systems. Alerts generated by the transaction monitoring systems are then prioritised and assigned as per the configuration made in the case management tool.
Integration with Regulatory Reporting: After AML Case Management Software’s detection systems generates alerts, and investigation process concludes with the need report the alert to the AML regulatory body, the Software assists the user tracking the status of the regulatory reporting task and helps avoid fines and penalties.
Aids in Case Investigation: AML Case Management Software makes the investigation of ML, TF, and PF alerts more efficient and swifter through uniform investigation workflows. It compiles data related to the case and organises the relevant information in an easy-to-understand manner.
Supports Collaboration: Cases can be easily shared between the staff of the business, so that they can collaborate for resolving of the cases in a timely manner. It can also be shared with Senior Management or Money Laundering Compliance Officer (MLRO) for approval, in cases of regulatory reporting, onboarding PEP, and other set criteria. The collaboration history is easily viewable, ensuring transparency and accountability.
Strengthens Internal Controls: AML Case Management Software automates and digitalises AML compliance tasks. This ensures transparency and accountability, resulting in strong internal controls. Senior Management and Money Laundering Compliance Officer (MLRO) can easily check on the status of compliance tasks and take informed decisions related to AML compliance.
Ongoing Monitoring: AML Case Management Software is integrated with machine learning and artificial intelligence. It prioritises cases and assigns them to respective users.

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Traditional Case Management Versus AML Case Management Software

AML Case Management Software is a next-generation solution which offers many advantages compared to tradition case management.

Traditional Case Management Vs. AML Case Management Software
Parameter	Traditional Case Management	AML Case Management Software
Manual Workflows Versus Automated Workflows	Traditional Case Management involves manual workflows, leading to delay in tasks, non-transparency in completion of tasks, difficulties in coordination, lack of accountability, etc.	AML workflows if a series of procedures aimed at completing AML compliance tasks. AML Case Management Software provides a streamlined workflow from case creation to close, ensuring all steps in the case investigation process are completed, on time, smoothly, transparently and uniformly. Automated, digital workflows also ensure speed and accuracy in resolving cases, as well as escalation if required. It also enables collaboration between staff involved in AML compliance, ensuring coordination. It is adaptable to changes in AML regulatory regime and ML, TF, and PF typologies.
Inefficiency Versus Efficiency	Traditional Case Management requires a considerable amount of resources, time, and an experienced workforce. Due to huge amounts of data to process and many AML compliance tasks, there is a scope for human errors, delays, non-transparency, difficulties in coordination, etc., leading to the compliance process being inefficient.	AML Case Management software centralises all customer information and compliance tasks on one screen. It also enables the timely investigation of alerts. Therefore, AML Case Management Software facilitates efficient management of complex web of AML compliance tasks and lengthy investigation processes.
Lack of Standardisation Versus Uniformity	While there may be a set criterion for the AML compliance checklist on paper, traditional case management is done manually, and therefore, there is a lack of coordination and transparency. Because the case workflow cannot be verified, there is a lack of uniformity and standardisation in the process of completion of tasks. Tasks may not be done properly, comprehensively, or on time.	AML Case Management Software is customisable, and its detection systems and workflows can be set with criteria for completing AML compliance tasks.

Case Management Software: Challenges and Considerations

Users may come across the following challenges and considerations when adopting and utilising the AML Case Management Software:

User Training: The staff of the users involved in AML/CFT/CPF compliance needs to be trained on optimally utilising the AML Case Management Software. When staff is not trained regarding the functionality of the Software, they are not able to leverage its functionalities and capabilities, resulting in delays and inefficiencies.
Cost: For entities that are smaller, it may be difficult to bear the financial costs associated with buying, implementing, training staff, and incorporating AML Case Management Software in the short term.
Resource Requirements: AML Case Management Software requires adequate computer operating systems, trained staff, and technological infrastructure for efficient performance.
Regulatory Changes: With evolving ML, TF, and PF typologies, AML/CFT/CPF regulatory regimes of countries also change to effectively combat these financial crimes. AML Case Management Software needs to be regularly updated to reflect changes in AML/CFT/CPF compliance requirements.

Check out the infographic detailing Case Management Software Challenges and Considerations contrasting with AML Case Management Software Implementation Best Practices.

AML Case Management Software Implementation Best Practices

Requirements Identification: AML Case Management Software is customisable and can be modified according to the evolving needs of the users. Workflows can be determined, set, and updated as and when required. Therefore, the AML Case Management Software will more efficiently serve the user when proper workflow, and other requirements are determined and set according to the needs of the user.
Features– Requirements Mapping: Once requirements for AML Case Management Software are identified, features mapping is essential. This involves aligning the identified requirements with the features of the Software. This ensures integration between the needs of the entities and the functionality of the AML Case Management Software.
End-User Training: Comprehensive training programs should be developed to familiarise users of the AML Case Management Software with its functionalities and best practices.
Establishing KPIs: Key Performance Indicators (KPIs) are quantifiable measurements that are used to examine the performance of a Software. Using KPIs, entities can ensure that their AML Case Management Software is working efficiently and as per the expectations of the user.
Collaboration with Regulators: Regulated entities can collaborate with regulators and understand their AML/CFT compliance expectations and configure case management system in such a way that those requirements are met to avoid compliance risks.
Improvement and Adaptation: AML Case Management Software should be regularly audited, and its health regularly checked, so that its functionality aligns with the needs of the entity. This proactive approach ensures that the AML Case Management Software works optimally in a way that best serves the needs of the entity.

Choosing the Right AML Case Management Software

The above discussed challenges and considerations can be overcome through choosing the right AML Case Management Software. Here’s a guide of functionalities to look for while choosing an AML Case Management Software:

Look out for an affordable, scalable, and customisable case management tool.
Case management tool should provide user-friendly interface, ensuring seamless navigation. Case management software should provide integration functionality with other AML Software solutions for comprehensive analysis.
Case management tool should make use of artificial intelligence and machine learning.
Case management software should support record-keeping and documents maintenance for creation of audit trails and meeting regulatory requirements.
The case management software vendor must provide end-user training services.
Case management software should allow for collaboration in AML compliance tasks and case investigation.
Case management software should provide customisable workflow setting for AML compliance tasks, case creation, investigation, and regulatory reporting.

Conclusion
AML Case Management Software future-proofs AML/CFT/CPF compliance through its next-gen solutions, and updatable, customisable, and easy-to-use interface. Adopting this technology optimises AML/CFT/CPF compliance and makes it robust, and comprehensive.

AML Audit, AML Compliance, AML Software, CDD, KYC, Risk, Screening, Transaction Monitoring

Dipali Vora

Dipali is an Associate member of ICSI and has a Bachelor’s in Commerce and a General Law degree.

She currently assists clients by advising and helping them navigate the legal and regulatory challenges of Anti-Money Laundering Law. She also helps companies develop, implement, and maintain effective AML/CFT and sanctions programs.

She knows Anti-money laundering rules and regulations prevailing in GCC countries and specializes in Enterprise-wide risk assessment, Customer Due-diligence, and Risk assessment.

CAMS, ACS