Academic journal article ABA Banking Journal

Anti-Money Laundering: The Benefits of Automating Your Process and Using an Application Service Provider Mode

Academic journal article ABA Banking Journal

Anti-Money Laundering: The Benefits of Automating Your Process and Using an Application Service Provider Mode

Article excerpt

The Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) are emphasizing that BSA audits will be thorough and have already demonstrated that BSA violations will result in stiff penalties against financial organizations. The $25 million fine imposed on Riggs Bank of Washington, D.C. and the $50 million fine imposed on AmSouth Bank of Birmingham, Alabama are recent examples. The regulators are also suggesting to organizations during BSA audits that trying to manually verify identity or detect suspicious activity is next to impossible. Even organizations with only one or two branches will need to determine whether they truly have the ability to monitor suspicious activities manually.

It is estimated that in the United States somewhere between $100 billion to $300 billion is laundered every year. Globally, the estimates run about $1 trillion. The odds that an organization will be used to launder money at some level are high.

As a result, financial organizations are looking to implement an automated AML system that is effective but also practical. Many organizations are turning to a technology solution because they realize that automating their AML process allows them to more quickly and accurately verify their customers' identities, know their customers' normal activity, and generate the legally required reports.

An Application Service Provider (ASP) service model presents a critical advantage to financial organizations contemplating decisions related to core processor selection, technology upgrades, or conversions in general. The ASP service model enables these organizations to make independent technology-related decisions without the fear of being encumbered by otherwise restrictive AML vendor software, often designed to operate on limited types of platforms. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.