How to Automate AML Compliance in UAE?

AML compliance is inevitable in UAE now post the issuance of Federal Decree Law No. 20 of 2018. Regulatory standards play a very important role in protecting the interests of financial organizations and consumers. As regulatory accountability and scrutiny surrounding areas such as Counter-Terrorism Financing (CTF) and anti-money laundering (AML) continues to increase, so does the opportunities for streamlining and improving compliance efforts to address financial crimes much more efficiently and effectively.

One opportunity in particular, towards which many entities operating in the financial industry are turning to is automated solutions, especially robotic process automation (RPA), to carry out daily compliance tasks much more accurately and quickly and that too in a manner that is cost-effective. RPA can be configured to completely automate large-volume repetitive tasks such as transaction processing and data entry, or even partially automate procedures related with AML compliance such as client screening, investigation and reporting of suspicious transactions. The ability to optimize generation and interpretation of data while streamlining the compliance processes has made RPA a popular tool among regulatory departments of many financial institutions. 

Opportunities for Automating Compliance Processes 

There are a number of procedures related with AML compliance that are more suited for automation. One of those processes is client screening, many institutions are using RPA in Open Source Intelligence (OSINT) research. In this application, robots automatically navigate and gather live data from any website.

Another process suited for automation is identifying suspicious activity through monitoring of transactions. RPA is ideal for transaction monitoring as it involves tasks that are of repetitive nature. When any transaction is highlighted as suspicious then an investigation order is generated for that transaction. The purpose of RPA is to help an entity’s human resource in optimizing their time and efforts through reducing the number of potentially suspicious transactions that must be investigated.

RPA is Worth the Investment

Customer screening and transaction monitoring processes usually require human resource to collect, compile and examine large set of data which is usually unstructured. RPA is straightforward and flexible to use and can be customized to fulfill specific parameters for analysis and interpretation of large volume of data quickly and accurately.

The speed and accuracy with which RPA can be utilized to collect and compile data from various sources can increase an entity’s efficiency and effectiveness with regards to risk and regulatory reporting.

The technology on which RPA is based is scalable in nature which enables adaptation to business environments of different dynamics and sizes, helping entities in preparing for compliance audits with less involvement of employees required.

Automated solutions such as RPA, helps entities in reducing the need for manual, deterministic and repetitive tasks. Considering this, many entities are already looking for ways to derive more benefits from a technology such as RPA by combining it with more advanced technologies, such as intelligent automation (IA). This will ensure increased efficiency, better compliance with laws and regulations as well as further simplified transactions.

IA bots provide its users with an increased level of process speed and accuracy by eliminating the need for manual data entry.  They can also centralize reporting data/ information into an entity’s desired template, increasing accountability and at the same time decreasing resources and time of by compliance teams.

Combatting Challenges that Lie Ahead

The benefits associated with adopting automated solutions are very clear but the widespread implementation of these solutions will require entities to tackle a few issues and challenges which have been explained below:

Documentation of standards or policies for existing compliance procedures must be comprehensive in order to identify potential areas that are suited for automation. A number of institutions may not have this information and would therefore be required to employ more employees to collect information about the aforementioned procedures before the process of automation can begin. 

Many financial institutions still don’t consider robotics as a long-term solution for automating compliance processes. Further, there are many senior executives that see automation implementation a difficult, complex, and time-consuming process.

IA and RPA integration could create friction within an institution among the management and employees. Automation goes hand-in-hand with scrutiny and vigilance on the part of employees, and identifying and resolving technical issues require proper training on robot-human collaboration. Without proper training and the ability to adapt, many small problems can materialize into service interruptions and delays which counter the original goals of automation. 

It’s highly important to mention that RPA is unlikely to completely replace existing jobs or business systems. Instead, automation provides organizations with an opportunity to concentrate employees’ capabilities and time towards higher value-added and more investigative tasks.

The Role of the Regulators in the Process of Using Automated Solutions

Many regulators around the world are increasingly showing encouragement towards businesses using automated solutions, recognizing the improvements which automated solutions bring to compliance processes. There are a number of regulators that are implementing RPA to enhance compliance via increased monitoring and analysis of suspicious transactions.

The importance of the role of AML departments within entities operating in the financial sector, in managing risk and reputation cannot be understated.

Future-oriented Technologies

Adopting automated solutions like IA and RPA to combat financial crimes, has the potential to generate exponential value for organizations in the financial sector. The benefits of enhanced accuracy and efficiency of data processing, automatic monitoring of suspicious transactions, and reduced time spent on repetitive tasks, demonstrate how automated technologies can help institutions in tackling financial crimes much more efficiently and effectively in a properly regulated business environment.