Improving productivity and efficiencies in AML Financial Intelligence Unit operations

A global financial services institution faced significant regulatory and reputational challenges due to a backlog of fraud and Anti-Money Laundering (AML) alert/cases within their Financial Intelligence Unit (FIU).

The organization also needed to enhance their AML Compliance Program to align with evolving regulatory requirements, expectations, and industry standards. Our client needed a team to work alongside them to design a fit-for-purpose program transformation and technology road map for the short and long term to achieve their end state vision.

The increasing regulatory expectations and financial crime trends, along with occurrences of fraud and criminals’ sophistication, have significantly impacted the financial services industry and compounded the risks for our client. AML backlogs are unfortunately not uncommon in the industry, and they can be very costly not only due to resource constraints but due to the exposure to regulatory fines and penalties. This environment highlighted the need for business processes and technology transformations as well as innovative optimization to ensure compliance and operational efficiency.

KPMG in Canada quickly assembled a specialized team of AML experienced professionals, including Team Leaders, Quality Assurance Leads, AML & Fraud Investigators, and Project Management Office (PMO) professionals to address the organization’s immediate and growing backlog.

During the remediation efforts, KPMG identified challenges with the existing AML technologies and tools, and helped identify a new AML technology solution as a replacement for the antiquated legacy system. This was accomplished through a very thorough approach to crystalize business and functional requirements, market landscape research, and RFP process.

In parallel, the client engaged KPMG to develop and implement quick win automations, ensuring readiness to file regulatory reports; Suspicious Transaction Report (STR), Large Cash Transaction Report (LCTR), and Electric Funds Transfer Report (EFTR) to FINTRAC via API, in compliance with new GEN 2 forms.  KPMG was tasked with leading several workstreams in the modernization program, including methodology and model calibration for customer risk rating and the universe of monitoring rules. This was done to align with regulatory requirements and to reduce false positives while enhancing operational efficiency. These efforts were part of the pre-implementation preparations for the new AML system implementation.

The automation of the organization’s key AML compliance processes provided overall reduction of manual workload while minimizing the risk of human error. This allowed compliance teams to focus on more strategic tasks rather than being bogged down by repetitive manual duties.

KPMG helped improve workflows and resource allocation, enhancing overall productivity within the AML Program. Along with the new AML solution we helped identify, the organization is well positioned to leverage advanced technology tailored to their specific needs, so they can better monitor and detect suspicious activities.

Our team’s guidance in developing a future state vision and road map has enabled the organization to proactively adapt to changing regulatory requirements, thereby fostering a culture of continuous improvement and compliance readiness. The integration of reduced turnaround times, automation, and advanced technology will allow them to navigate the evolving regulatory landscape efficiently, while supporting sustainable growth and operational excellence in the future.