š¹ Definition
AML Screening Software refers to automated technology tools used by organizations to screen individuals, entities, and transactions against various watchlists, sanctions lists, politically exposed persons (PEP) databases, and adverse media sources. The goal is to identify potential money laundering or terrorism financing risks before onboarding clients or processing transactions.
These tools are a core component of modern AML compliance programs, enabling real-time or batch screening, configurable risk thresholds, and automated alerts. Effective AML screening helps businesses stay compliant with regulations, reduce manual workload, and avoid engaging with high-risk or sanctioned parties.
š¹ Frequently Asked Questions (FAQs)
Q1: What types of lists are included in AML screening?
AML screening typically includes:
- Sanctions lists (e.g., OFAC, UN, EU, MAS)
- Politically Exposed Persons (PEPs)
- Watchlists from law enforcement and financial intelligence units
- Adverse media databases from credible news sources
Q2: How does AML Screening Software work?
The software compares customer names or transaction parties against external databases. It uses fuzzy matching algorithms to detect close name variations, flag potential matches, and notify compliance officers for review or escalation.
Q3: Who needs to use AML screening tools?
Financial institutions, fintechs, corporate service providers (CSPs), real estate agencies, legal and accounting firms, and other regulated businesses must use AML screening as part of their Know Your Customer (KYC) and due diligence processes.
Q4: What features should good AML Screening Software include?
Key features include:
- Real-time and batch screening
- Global sanctions and PEP database access
- Adverse media monitoring
- Customizable risk scoring
- Case management and audit trails
- Ongoing monitoring with periodic updates
