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Anti Money Laundering (AML)  

Events over the last few years have led to an increased emphasis on the need for financial institutions to have in place effective Anti Money Laundering (AML) frameworks.

Within these frameworks, the monitoring of suspicious transactions is taking on a pivotal role. However, the costs of implementing automated solutions for the monitoring transactions is significant.

CAPS is working closely with interested partners in the regions to put in place an AML service to meet the exacting standards recognised globally as being required to combat the threat of terrorist organisations.

CAPS believes that an ideal approach to overcoming this challenge is to deploy the AML engine in a shared service utility. Suspicious transactions monitoring lends itself to a shared services model for several reasons:

Economies of Scale
AML rule-sets are now mostly to be found in third party AML engines. The cost of purchasing these engines together with the underlying architecture is not inexpensive. There are obvious economies of scale to be had if multiple banks can be run off a single architecture.

No Competitive Advantage
In common with the other aspects of AML, internalizing this component is unlikely to provide the bank with any competitive advantage. The corollary is that outsourcing it does not put the bank at a competitive disadvantage.

Rule-set Knowledge
The expert domain knowledge required for understanding and identifying patterns of suspicious behaviours is in short supply in the market. Localizing this expertise in one organisation will prove to be more feasible and more effective.

Clear Service Scope
The nature of the monitoring and alerting process is such that it can be commoditised and packaged and delivered within a tightly defined service agreement.

Regulatory Compliance
Institutions and jurisdictions utilizing the service can clearly demonstrate they are adhering to international best practice standards. Furthermore, the approach can also serve to raise compliance capabilities simultaneously across a number of banks.

For more information please contact us here.