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Risk profile assessment for AML 

With $2 trillion in money laundering and $80 billion in insurance fraud occurring each year, companies across the U.S. and the globe are faced with significant financial crime at every turn. And, with additional regulations coming all the time, the importance of properly assessing risk is as great as ever, if not more so.

Unfortunately, the depth and complexity of the data used to evaluate risk seems to be only deepening.

An organization not properly equipped to handle the ever-expanding complexity of data may be facing more time-intensive and less accurate risk assessments as a result – missing key opportunities to mitigate their company’s financial and reputational risk in the process.

Common dangers with inaccurate risk assessments

Organizations are attempting to keep up with regulations while simultaneously increasing overall efficiency. According to a recent survey conducted by ACAMS and Thomson Reuters, the top priorities for AML departments include training existing staff and process automation. And now, more than ever, they’re focused on real-time risk assessment. However, one of the main challenges they face is dealing with inaccurate or incomplete data – especially when it comes to assessing risk.

When running searches on a subject, companies may be seeing a lot of false positives, false negatives, or both.  Simple data searches aren’t always reliable enough to return the results they’re looking for, wasting valuable time and decreasing efficiency.

For example, if a case file is flagged for risk due to a false positive, an employee must spend time to resolve that flag when the case file should likely have never been flagged from the start. When searches return significant amounts of data, it’s challenging to see right away what is or is not relevant to your company.

Additionally, more organizations are relying on in-house data to formulate their risk profiles and assessments. But they may not be seeing the complete picture. Without reliable access to public records, companies might be missing key aspects of their potential customers – aspects that may mean the difference between doing business with them and filing a Suspicious Activity Report against them.

 So how do you determine what the right data is in order to make accurate risk assessments?

Minimize risk with customized risk scoring

The solution to more effective risk assessment is a customizable, repeatable process using reliable data and an intuitive interface.

Once a company has created their specific risk definitions, they can then use software to collect data from multiple sources, run searches, and return results that are relevant to the organization’s specific risk tolerance and definitions. Using factors like sanctions, PEPs, criminal records, bankruptcies, liens, judgments, negative news, and more, companies can assign specific risk scores based on the aspects that fit their risk appetite.

By using configurable risk assessment tools, companies can determine what risk factors are important, as well as how important each one is, and use the data to provide them with a fast, clear picture of whether a subject is too risky to do business with.

Tackling the money laundering monster

Despite the best efforts of companies everywhere, hundreds of billions of dollars are laundered in the U.S. each year. Combating fraud and money laundering is a daunting task, and the more tools a company has in its arsenal, the more efficient and effective they can be.


Safeguard your organization with CLEAR Risk Inform

Quickly review risk indicators such as arrests, bankruptcies, redundant SSNs, synthetic identity, and more. CLEAR Risk Inform lets you automate and configure risk analysis to fit the unique requirements of your organization.

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