A Broader Skillset – The Key to Effective Anti-Money Laundering
AML regulations are becoming stricter and oversight more comprehensive. With the AML Regulation coming into force in 2027, AML is now seen as one of the biggest risks for financial institutions.
Laws and regulations establish the framework, but their practical implementation determines their effectiveness. Over the years, Advisense has recognised that the most effective approach to combating money laundering involves a combination of regulatory expertise, operational experience, risk modelling proficiency and deep technical knowledge.
A broader skillset is needed to understand the realities of financial institutions' daily operations, how to develop and adapt risk models, and apply a strong technical grasp of system integrations. Ronny Gustavsson, Director and Head of Financial Crime Prevention at Advisense Sweden and Chris Kronow-Rasmusen, Director at Advisense Denmark, discuss the keys to effectively combatting money laundering beyond regulatory frameworks.
The Importance of a Diverse Skillset in Combating Money Laundering
In an increasingly complex and regulated financial landscape, deep regulatory knowledge alone is no longer sufficient for effective anti-money laundering (AML) efforts. To successfully support clients in the financial sector, a broad and well-balanced skillset encompassing operational experience, risk modelling, system integration, and process flows is essential. At Advisense, we have learned through extensive experience that this combination is crucial in delivering truly valuable solutions for our clients. This is why we have experts with diverse skills and backgrounds, ensuring that we provide the best possible solutions.
Regulatory Expertise – Necessary but Insufficient alone as a Foundation
The regulatory framework governing AML has evolved dramatically over the past decades. Financial Action Task Force (FATF) recommendations, new EU directives, European Banking Authority (EBA) guidelines, and national regulatory requirements continuously require banks and other financial institutions to adapt their processes. As such, regulatory expertise is a fundamental requirement for interpreting and implementing these rules.
However, experience has shown that a strictly regulatory approach, without operational understanding, often results in suboptimal solutions. The true intent of the regulations may be overlooked and can lead to inefficient, costly, or even counterproductive implementations. This is where a broader skillset becomes crucial.
Operational Experience – Contextual Understanding
To create solutions that work in practice, deep operational experience is required. This entails understanding how AML processes function in the day-to-day operations of banks, fintech companies, and other financial institutions.
For instance, a risk-based Know Your Customer (KYC) process must not only meet regulatory requirements but also be efficient and user-friendly to minimise friction for customers. Similarly, transaction monitoring must be based on insights into real-world transactions to identify suspicious patterns without generating excessive false positives. Operational experience enables the identification of bottlenecks and inefficiencies, allowing for solutions that are not only compliant but also seamlessly integrated into daily operations.
Risk Modelling – Designing and Adapting for Real-World Application
A risk-based approach is a central principle within AML, requiring a deep understanding of how risk models should be developed and adapted. Effective risk models must be based on both regulatory requirements and empirical data.
In transaction monitoring, for example, this means developing models capable of distinguishing between genuine high-risk activities and normal business transactions. This demands expertise in data analysis and risk modelling, combined with an understanding of how criminals actually launder money. A static model based solely on traditional rules is often ineffective, whereas a dynamic, data-driven model can provide far more accurate risk detection. Additionally, costs associated with transaction monitoring can be reduced by implementing algorithms that assess alerts generated by the monitoring system.
System Integration and Process Flows – The Technical Key to Efficiency
Another critical component is system integration and process flows. Most financial institutions operate within complex IT environments, where AML systems must interact seamlessly with other systems, such as CRM, transaction processing, custody services, accounts, credit facilities, and regulatory reporting.
Achieving this requires technical expertise in APIs, data integration and system architecture. Inefficient integration can result in delayed AML processes, incomplete data transmission, or disrupted information flow between systems. By combining knowledge of technical process flows with operational and regulatory expertise, Advisense assists clients in building systems that are not only compliant but also highly effective in daily operations.
Conclusion: A Diverse Skillset is the Key to Success
Over the years, Advisense has recognised that the most effective approach to combating money laundering involves a combination of regulatory expertise, operational experience, risk modelling proficiency and deep technical knowledge.
Laws and regulations establish the framework, but their practical implementation determines their effectiveness. By understanding the realities of financial institutions’ daily operations, developing and adapting risk models, and having a strong technical grasp of system integrations, Advisense delivers real value and sustainable solutions to our clients.
As money laundering threats continue to evolve and become more sophisticated, organisations that successfully integrate these competencies will be best positioned to combat financial crime effectively.
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