We have helped our clients solve technology-related challenges in almost every major industry and in almost every area of business and technology. We’ve evaluated acquisition targets for boards, helped CEOs with business strategy, defined technology roadmaps for CIOs, automated processes to drive efficiency for CFOs, written software and APIs for CTOs, and done a host of tactical things in support of all of it. We have built great relationships with our client peers and had a lot of fun along the way.
What we have not done is told everyone the stories behind all this great work, and how or why we chose each project, client, industry, or area of specialty. Not all our stories are mine to tell, so in this writing I will focus on an area of our expertise that we have never talked about outside of a small group of clients: Anti-Money Laundering (AML).
AML refers to a set of laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income. Financial institutions are charged with monitoring transactions through their systems to ensure the funds in those transactions are not being used for criminal activities and ensuring the parties to those transactions are known to (and approved by) the institution.
Financial institutions were first officially given AML responsibility with the Bank Secrecy Act of 1970, and several laws since have added scope and teeth to the requirements. Notable scope additions have included regulations for better detection of the funds behind drug and human trafficking, and requirements to interdict terrorist financing.
This is a heavyweight responsibility on the part of our financial institutions and creates the need for the right data, process, and technology. This is where Allata comes in.
Since our first year in business, we have worked in the Anti-Money Laundering space in three ways:
1. Software selection
Allata’s selection process involve gathering institution needs, understanding the risk profile, scanning the market for appropriate vendors, conducting an RFI/RFP,and selecting a vendor based on a weighted evaluation framework.
AML software includes monitoring/alerting, onboarding/KYC, wire management, data management and enrichment, watch list management, and others.
2. Implementation management
Allata has experience in managing multi-year, multi-vendor, multi-million-dollar initiatives. In the case of many of our financial services clients, their in-house project management office is spread thin across multiple concurrent projects and do not have the capacity or experience to manage an AML software implementation.
3. Data aggregation/quality/analytics
The efficacy of current off-the-shelf AML solutions is largely dependent on data. Allata helps financial institutions define data strategies, implement data warehouses/repositories/streams, achieve data lineage and quality, and use AML data to benefit both the financial crimes department and their business partners.
Analytics is a particularly interesting dimension of our work, as the advancement in raw data processing, machine learning, and artificial intelligence transform the way alerts are generated, data gathered, and decisions made.
I am often asked how Allata got into AML projects, sometimes even by our consultants who are engaged on these projects.
There are five big factors:
- The problem domain is interesting (catch bad guys with algorithms) and we strive to provide our consultants with interesting work just like this.
- The current technology is a grab bag of proven (read older) monitoring technology and cutting-edge data solutions. We are uniquely equipped to bridge these two.
- The work is important (protecting our nation and financial systems).
- Strong, positive client relationships are important to Allata and the anti-money laundering community is full of committed, passionate people – just the sort of people we want to work alongside to make AML efforts stronger.
- We have identified several regulatory and technology inflection points along an institution’s growth path, and feel uniquely qualified to help at each of these points.
Most services firms in the AML space offer either advisory services, regulatory audit,outsourcing, or implementation of a single vendor solution.
Allata occupies a unique role: we offer a suite of services that helps financial crime departments pick the right software for their needs, implement that software, ensure the data that feeds the software is accurate, and then use the output for the good of the institution.
