Choosing the Right AML Software: A User Guide
In today's regulatory environment, a robust Anti-Money Laundering (AML) program is a non-negotiable for financial institutions. Choosing the right AML software solution is the foundation of that program; but to make sure you choose software that doesn’t surprise you with hidden costs or difficult integration, here are 7 important thoughts to consider:
1. Data Integration / Cleanliness
Does it connect to your core banking system(s), ledger / transaction data, wire systems, check processing, etc.?
How much effort is required to map fields / transform data?
2. Vendor Support & Onboarding Time
How long from contract to go‑live? Weeks or months?
Who does the configuration / rule writing / case templates?
Does the vendor provide “out‑of‑the‑box” scenarios for community banks?
3. False Positive Rate & AI Explainability
The more false positives, the more work for your team.
If using AI as part of the solution, how “explainable” are the alerts / risk scores, to pass regulatory / examiner scrutiny?
4. Modular / Scalable Pricing
Can you buy only what you need initially (e.g., only transaction monitoring + sanctions), then add in case management, reporting, or KYC later?
Are module or user/licensing fees transparent?
What will your core provider charge for integration into the AML software?
5. Regulatory / Reporting Features
Built‑in CTR/SAR filing or easy export and audit trail?
Automated Watchlist screening and tracking?
Are PEP/sanctions lists updated as required?
6. Cloud vs On‑Prem or Hybrid
SaaS/cloud solutions typically lower upfront cost but may have subscription fees, data security, vendor risk, etc.
On‑prem gives you more control, possibly higher cost, as well as internal IT burden.
7. Team Size & Skill Level
If your BSA team and IT staff are small, vendor service capability matters a lot (i.e., complex tools with lots of bells and whistles are only helpful if someone can manage them).
Conclusion: Making the Informed Choice
Selecting AML software is a high-stakes decision that impacts compliance, operational efficiency, and your bottom line for years to come. Need expert guidance to navigate the complex AML software landscape? The team at SCA can help you assess your requirements, evaluate vendor solutions against these critical factors, and ensure you select the best fit for your institution. Contact our Director, Bill Dolan at wdolan@scapartnering.com or by phone at (617) 694-2617.
