[2] The MLR 2017 transposes the obligations set out in the EU's 5th AMLD, tightening controls in the private sector and introducing the requirement for firms to implement a written AML/CFT risk assessment.
This has led to the development of an AML industry dedicated to providing software for analyzing transactions in an attempt to identify suspicious patterns that qualify for reporting (for example, structuring, which requires a SAR filing).
Financial institutions may face penalties for failing to properly file reports, including heavy fines and regulatory restrictions.
[3] There are four basic types of software addressing AML business requirements: These software applications effectively monitor bank customer transactions on a daily basis and, using customer historical information and account profile, provide a "whole picture" to the bank management.
Some of the modules which may be present in an AML software are: The definition for Customer Identity Management Systems varies in different regions and jurisdictions.