AMLcheck: an anti-money laundering technology watchdog

Someone makes an online bank transfer and writes "bombs for Syria" in the subject line. Surely you wouldn’t think it funny if your bank blocked the transaction because of this text.

And it is not that the entity has not understood the "concept", it is that when it comes to money laundering or possible terrorist financing, the law does not have a sense of humour. International regulations on the Prevention of Money Laundering and Terrorist Financing (AMLCFT) - such as those in force in Europe - make it necessary to be extremely vigilant in monitoring the activity of certain obliged entities that can be used as a vehicle for this type of suspicious activity.

If banks, insurance companies, real estate companies, money remittance companies and online gambling companies fail to apply the controls required by the regulations, they risk heavy penalties. These range from fines of millions of dollars to the possibility of imprisonment for all individuals who, by their actions or their omissions, contribute  to facilitate such operations.  

Regtech’s upward trend

Global digitisation may offer some advantages for concealing suspicious movements of money, but it also enables the development of tracking solutions with unprecedented processing capacity. This has led to exponential growth in the sub-sector of technologies for regulatory compliance, such as those developed by RiskMS, the first regtech in Spain (integrated in the Prosegur AVOS ecosystem).

One of them is the AMLcheck software, the only one in the Spanish market that, with its 360º model, covers the entire spectrum: from all of the customers of these companies to the data and traces generated by their transactions. This first functionality checks whether a potential new customer of an entity is on the list of individuals that have been subject to sanctions, or on the lists of terrorist and politically exposed individuals.

This mandatory control makes it possible to decide whether a person is finally accepted as a client, and thanks to the economic information associated with the profiles, it is possible to classify customers into different risk levels so that obliged entities can carry out more exhaustive monitoring, even on a daily basis. Over the course of the year, RiskMS records tens of millions of personalised checks, and hundreds of millions of daily transactions that Compliance departments would not be able to handle if it were not for this type of technology.

Muscle, brain and flexibility

AMLcheck software provides the muscle that automates screening in accordance with the legal requirements and compliance protocols of each company, so that human teams can focus on the analysis and subsequent response to suspicious transactions detected in order to report them to the authorities. It also provides the brains, or in other words, the intelligent analysis to detect anomalous patterns hidden in this immense volume of data. And it offers the necessary flexibility to adapt to different business models.

In this regard, a money remittance company is not the same as a retail bank, an entity specialised in international investments or a real estate servicer. However, the software allows them to adapt the tracking to their own activity.

AMLcheck has been designed with as much flexibility as possible to fit the particular needs of each company. "The proximity to our customers is a differential value," says Esteban Calderón, Head of Customer Services at RiskMS. "This mutual trust allows us to understand their concerns and protocols for the prevention of money laundering and terrorist financing so that the configuration of the software responds precisely to their needs," adds Calderón.

"It also allows them to fully understand the technology, how and to what extent it can help them to optimise their performance and resources. We provide them with the dynamism of a startup to adapt the technology, years of experience in markets such as banking or real estate [RiskMS accounts for 80% of the servicer sector in Spain] and the backing of a group like Prosegur", underlines Rafael Sanchez Riesco, Product Director.

Evolution for change

The software is constantly evolving due to changes to the regulation, changes in the market or changes in the companies' business. Under this umbrella, the level of detail in the configuration is truly remarkable.

By way of example, Sanchez Riesco points out that: AMLcheck works with algorithms that analyse the phonetic components of the names that are being tracked, i.e. how they are pronounced so that if an incorrect character is entered it does not generate false alerts. It also trains in the incorporation of machine learning to detect incidences, in accordance with the specifics of each legislation.

In any case, according to RiskMS, the software provides a cross-cutting range of benefits: from avoiding sanctions and reputational damage that is difficult to repair or reverse, the added value of technology when compared to other competitors that are not so digitised and, beyond that, the contribution to the country's legal security and the fight against money laundering.