Anti-money laundering software (AML software) is software that can detect money laundering practices and immediately generate a report to be looked over by a person to see if the practices are legal or illegal. For legal and financial institutions, having an anti-money laundering software package is essential to ensuring there are no customers who are committing money laundering felonies. The best anti-money laundering software will have case studies that display the software’s effectiveness, will be based on a variety of risk factors, will alert employees immediately when there is a risk and will maintain a constantly updated watch list of businesses and people.
Some software is effective by its own merit, but this is not the case with anti-money laundering software. A case study will show a case, or several cases, in which AML software has been deployed to a financial institution such as a bank and will display whether the software was effective in ascertaining risk. Without an effective case study, it can be difficult to determine if the software is capable of recognizing money laundering activities before they damage the company.
Most anti-money laundering software is programmed to check out purchases of $10,000 US Dollars (USD) or more because purchases of this size must be reported. Advanced money launderers understand this practice and create ways to g around this reporting. The best AML software will be able to recognize a variety of risk factors, suspicious spending and depositing trends to find money launderers. Software that can only recognize a few risk factors will increase the chances that a business will be affected by money laundering.
If there are only a few customers to worry about, then it can be easy for employees to check on each person when the risk factors reach a dangerous level. This is rarely the case, and most businesses that need anti-money laundering software have thousands of customers or more. Having AML software that generates a report and immediately alerts employees when a customer becomes a risk is better than a program that detects risk but offers no alert until prompted by a company's employee.
Repeat money laundering offenders are generally placed onto a watch list so other institutions know who to watch out for. Keeping this list handy will make it easier to stop these offenders and will help a business know who to watch. Anti-money laundering software that automatically updates that list is likely to be the best choice.