How to Implement Ongoing AML Monitoring (and Supervise High-Risk Clients)
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Key takeaways
Ongoing AML monitoring detects risks in real-time after onboarding and prevents 80% of post-registration fraud from going unnoticed.
Classifying users by risk profile automates the monitoring process, allowing compliance teams to quickly act on suspicious activities.
Didit offers the only free and unlimited KYC solution on the market, reducing operational costs by up to 90% compared to other AML solutions.
Ongoing AML monitoring is crucial for compliance with international regulations like FATF and for avoiding financial penalties and reputational damage.
Ongoing AML Monitoring is a fundamental pillar in the fight against financial fraud and money laundering prevention. In broad terms, this process ensures that customer due diligence remains accurate after users first join your service. Why is this so critical? Because according to recent studies, 80% of fraud occurs after the onboarding stage.
Fraud statistics have skyrocketed. The Financial Action Task Force (FATF) reports that only 1% of globally laundered money is detected despite developments like Ongoing AML Monitoring. This is the main reason why regulatory pressure from different countries continues to increase.
To help you understand why Ongoing AML Monitoring is important, how to avoid fines for non-compliance with prevention regulations, and how to ensure your business's health, this article will explain everything related to continuous monitoring and how tools like Didit can help your business comply with regulations at the best possible cost.
What is Ongoing AML Monitoring and Why Is It Important?
Ongoing AML Monitoring is the process that ensures your users' due diligence remains up-to-date and helps identify potential risks that may arise after the initial onboarding process. Automatically and periodically, verified users who have already passed initial AML Screening procedures are checked against various databases (watchlists, sanctions lists, politically exposed persons...), ensuring records stay current and potential risks are mitigated.
The objectives of this functionality are:
- Identifying changes in user risk profiles
- Early detection of potential suspicious activities
- Complying with evolving regulations
- Avoiding fines and financial losses
- Demonstrating a proactive approach to fraud prevention
In fact, ongoing monitoring is one of the best practices recommended by FATF to combat financial fraud.
Why is Ongoing Monitoring Crucial?
Keeping user records updated is a key task in combating fraud. Four out of five illegal actions occur after the onboarding stage, so ensuring that your user base remains within desired risk thresholds is essential for maintaining the health of any institution.
This functionality is central to risk-based strategies, which are increasingly common among financial companies. If a user displays unusual behavior or if problems emerge during automatic controls, compliance teams can analyze in detail what happened and make informed decisions appropriate to the situation.
High-Risk Clients: How to Identify Them Correctly
Risk profile-based strategies are one of the most common approaches within any compliance department. This involves categorizing users according to various dynamic categories, based on different variables such as geographic location, date of birth, or their status as a Politically Exposed Person.
Defining and segmenting customers based on their risk profiles is essential. This practice helps make the continuous monitoring process much more effective, especially in institutions with a high volume of users. In these cases, it's crucial to minimize manual tasks so the compliance team can focus on what truly matters: detecting potentially suspicious activities.
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Key Steps to Implement Ongoing AML Monitoring in Your Company: A Step-by-Step Guide
Any institution that is an obligated entity and must comply with AML/CFT regulations (Anti-Money Laundering and Combating the Financing of Terrorism) should integrate a continuous monitoring plan as part of its prevention manual.
Step 1: Define and Segment Risk Profiles
The first step is to define in detail the different groups according to risk profile. To do this, you should consider various factors, such as the industry in which you operate, the client's location, or potential hits against the various lists against which you check user information.
Step 2: Establish Surveillance Procedures
Having the right tools is essential when monitoring users. For this purpose, functionalities like Didit's continuous monitoring can help automate tasks and reduce the workload of the compliance team.
These automated AML checks should be performed daily. User data should be checked against various sanctions or watchlists, or for PEP status. Monitoring transactions to detect unusual ones is also another fundamental lever in combating fraud.
Step 3: Customization and Parameter Adjustments
Users are dynamic entities within different risk profiles. It's common for a single user to move through different groups during their relationship with the company without it necessarily indicating potential fraud. That's why adjusting thresholds is key to detecting changes in customer behavior patterns.
With Didit, you can customize risk thresholds to maximize automation and detect possible changes in your users' status.
Step 4: Continuous Training of the Compliance Team
Training and creating a compliance culture, first among the teams themselves and then throughout the company, is fundamental in the fight against money laundering. It's extremely important that teams stay up-to-date with regulations through continuous training and tests that ensure the learning of this knowledge.
Step 5: Continuous System Review and Improvement
Regular internal audits will help detect potential bottlenecks, especially when this continuous monitoring process is done manually, as well as refine the different risk profiles. These internal studies will allow better fine-tuning of parameters and thresholds, making the compliance team's work more effective.
Common Errors When Implementing Continuous Monitoring (and How to Avoid Them)
What are the most common errors when implementing Ongoing AML Monitoring in businesses? Experience helps us identify three main types of errors:
- Poorly defined risk profiles. This is one of the most common problems, occurring when risk profiles aren't correctly defined or some of their dimensions are missing.
- Problems arising from manual tasks or lack of automation. With a large volume of users, manually managing tasks can lead to failures or errors, besides being an inefficient process. Automating these monitoring tasks can help companies optimize resources. For example, if a warning signal appears, depending on the configured parameters, an approved session should change to 'Under Review' or 'Rejected' without manual intervention, so the compliance team can check what happened.
- Not adapting monitoring to regulatory changes. Regulations, like other factors mentioned throughout this guide, aren't static and evolve to combat the new fraud methods that continually emerge. Adapting to these regulations is essential for establishing a successful continuous monitoring plan.
Didit as an Ally for Complying with International and Local AML Regulations
Didit has become the main ally of more than 700 companies like yours that need to verify their users' identity and comply with national and international regulations on money laundering prevention. What makes us different? We offer the first and only free and unlimited identity verification (KYC) plan in the market, along with other features like AML Screening or Ongoing AML Monitoring, allowing companies to establish regulatory compliance without wasting their compliance budget.
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Key Benefits of AML Monitoring with Didit vs. Other Solutions
In addition to the experience gained from working with more than 700 companies, some of the most important in their sectors, choosing Didit as your AML solution over other market options offers the following benefits:
- Best market price, with savings of up to 90% compared to other market tools.
- Simple and quick integration, with an API that can be operational in just a couple of hours or sessions that can be launched directly from the Business Console.
- Regional and parameter customization. You can choose which countries and documents to work with to ensure regulatory compliance.
- Automatic status changes if there are changes in user sessions. Additionally, your compliance team will receive real-time alerts if any indicators requiring supervision appear.
- We have ISO 27001 certification and comply with regulations such as GDPR and eIDAS 2, to guarantee information security.
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Conclusion: Continuous Monitoring, Key to Complying with Regulations (and Avoiding Fines)
Ongoing AML Monitoring is a fundamental feature in the fight against financial fraud. This functionality allows companies to ensure that their users, once verified, remain compliant with regulations, maintaining ongoing customer due diligence.
Among all market solutions, Didit stands out as the only one offering a free and unlimited KYC plan. Why is this important? Because identity verification is the first step of any anti-money laundering program. This powerful functionality joins others like AML Screening and Ongoing AML Monitoring, allowing institutions to establish the foundations for regulatory compliance in money laundering prevention.
You too can join the more than 700 companies already working with us. Just click on the banner below and start revolutionizing your identity verification process with Didit. With the advanced features of our Pro Plan, you can transform how your compliance team meets regulations, saving up to 90% compared to other market tools.
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