Right now, anti-money laundering (AML), fraud detection, and sanctions monitoring tend to be handled separately. But that’s starting to change.
The future’s all about bringing these functions together: creating a unified risk management system. If you’re monitoring everything under one roof, you’ll get a more complete picture of the threats facing your business, which helps you tackle them more effectively.
You might be fed up with hearing about a data-driven approach, but if you’re not already shifting to one, it’s time to get moving.
Firms increasingly need to bring data together from multiple sources – KYC checks, transaction monitoring, screening information, external data sources, etc. – and use it to create a clear, big-picture view of risk. This way, instead of firefighting, you can understand the risk picture more clearly, allowing your teams to make informed decisions, faster.
We should also see the increasing use of public-to-private partnerships, and private-to-private partnerships, where data and intelligence will need to be shared and consumed on a more constant basis.
We’re already seeing automation and AI step in for tasks like KYC data collection, analysing networks, scanning the media for FinCrime-related intelligence, monitoring communications, summarising information and conducting behavioural analysis on transactions.
These tools are only going to get smarter and more integrated into every part of AFC.
The real value? They can process vast amounts of data, automate low value tasks, spot patterns, and flag risks that would take a human analyst far longer to pick up on.
And by freeing up people from the grunt work, these tools promise to help improve both effectiveness (identifying more financial crime) and efficiency (faster processes, with more accuracy), which will always be the goals of AFC teams.
As more tasks get automated, the role of the Financial Crime Analyst will evolve.
Analysts will shift to higher-value work, like risk analysis, designing AFC programmes and reacting to the latest threats. They’ll need to be more tech-savvy too, with stronger skills in data analysis and technology.
In short, it’s becoming an even more technical and specialist job than it is today.
The pace of change isn’t slowing down anytime soon. Whether it’s new regulations, business shifts, or fresh threats, everyone needs to be on board with adapting.
AFC can’t just be the job of one department anymore. Financial crime risk management has to become a company-wide responsibility, with the flexibility to react quickly to whatever’s coming next.
In practice, firms will need to implement incredibly robust change frameworks in AFC within which to manage their overall change portfolio – from minor change to major strategic transformations – alongside BAU activity. To support this, all AFC practitioners will need to be extremely well versed in change methodologies and processes to support this constantly evolving, changing function.
The more innovative firms are moving away from static AML risk models. Instead, they’re heading for more dynamic models that can look at entire networks, pull on historical data, and track behavioural patterns. The idea is to predict risk more dynamically, and therefore accurately, based on real-world behaviour and combining of all available data.
As these models evolve, there will be an increased demand for specialised skills in data science, machine learning, and predictive analytics. Analysts and risk officers will increasingly focus on interpreting complex data outputs and managing dynamic, real-time risk scenarios.
Collaboration between data experts and risk professionals will become crucial, creating hybrid roles that blend AFC expertise with data science proficiency.
As much as the world of financial crime prevention is changing, some things aren’t. People and culture will always be at the heart of a good AFC programme. No matter how much tech you throw at the problem, it still comes down to having the right people in place, and the right management support to make it all work.
Good governance and controls will always be critical, too. It doesn’t matter how smart your systems are if your internal controls are shaky.
It’s easy to get caught up in all the new tech and trends, but at the end of the day, lasting success is always founded on ‘World-Class Basics’: strong governance, skilled people, firm-wide AFC culture and solid controls.
Once you’ve nailed the basics, you can start layering on the fancy stuff.
So, where are you now? Where do you need to get to? And how are you going to make that change? Focus on those questions, and you’ll be in good shape for whatever comes next.
Are you facing a mammoth task transforming your financial crime and regulatory operations functions? As the old saying goes, “A journey of a thousand miles begins with a single step”.
At BeyondFS we’re here to help you understand what it will take to put in place 'World-Class Basics', building the foundations for a cutting-edge FinCrime approach. Get in touch today.
