In a financial world full of red tape and regulations, it’s essential to choose the right AML solution for your business. Whilst considering all the software and systems you need to maintain compliance, you also need to factor in the cost of AML solutions.
In this guide, we’ll discuss how AML pricing is decided, how different providers operate and what factors affect the price your business pays.
If you’re looking for an all-in-one AML solution that offers long-term savings, we have the perfect option here at SmartSearch.
AML software can vary greatly in price when comparing providers. It might be shocking to see such a wide range of prices, but there are a number of factors that determine pricing:
The more customers your organisation processes, the larger the volume of checks your company needs to conduct. Higher quantities of checks mean the need for more sophisticated software, leading to a higher cost.
Customer due diligence is an essential part of AML requirements for every financial business, but the level of due diligence required varies. For enterprises or larger corporations, enhanced due diligence is essential for managing threats surrounding high-risk customers, which requires additional software and, therefore, additional costs.
Smaller businesses can organise periodic monitoring of customers, which can be done manually or with scheduled automated checks, helping to keep costs down. Larger companies with high volumes of corporate and individual clients need to have continuous monitoring in place, which requires automated software to flag any changes to PEP and sanction lists. This round-the-clock automation increases operating costs and typically raises the price of your AML package.
If you handle transactions and customers across multiple jurisdictions, this requires more detailed SIP and PEP assessments to determine if individuals are making transactions in countries at higher risk of corruption and fraud. This again requires more advanced AML measures, which increases the cost.
When choosing the right AML compliance tool, providers often create bundle services but can also offer standalone services for things like ongoing monitoring software and KYC checks. This also affects the price as bundles will typically be more expensive, but include everything you need for full AML compliance, whilst paying for individual services can be cheaper but may work out at worse value for money if you’re a larger corporation and need a robust range of AML software and solutions. Ultimately, the option you choose in this situation depends on your business needs and AML requirements.
In order to accurately assess the price of AML solutions, it is important to understand the breakdown of the core components.
The main element of KYC checks is identity verification, which includes:
Sanction and PEP screening involves software inputting customer details into databases, including the Dow Jones Watchlist, and scanning for any matches that indicate an individual is a Politically Exposed Person or an organisation has been issued sanctions. The wider the data coverage, the higher the cost, as more databases need to be scanned.
This is one of the more significant factors that affects the cost of AML. Ongoing monitoring checks involve periodically assessing customers to determine if their status as a PEP or risk level changes. Some providers charge for individual checks, especially if automation isn’t used, whilst other vendors offer a subscription-style plan where the service is paid for in tiers based on how many checks are required in a given timeframe.
Enhanced due diligence increases know your customer pricing, as this is an additional service outside of standard due diligence checks. Any high-risk industries and jurisdictions will increase the price as they need EDD to ensure compliance with strict regulations.
To get an idea of how the pricing structure for AML systems works, here are the main models.
This model bases AML and KYC pricing on an individual basis. This means that the cost is determined per verification check, which is ideal for smaller businesses with a lower volume of customers.
With this model, AML services are charged on a monthly or annual basis. The cost is often divided into tiers of usage, which helps businesses to budget and control AML costs based on their usage needs.
When volumes of checks increase, the price per check decreases and becomes a better value for money. If you’re an enterprise business, tiered pricing based on the number of transactions and customer checks allows for long-term money saving with integrated AML platforms that cover all bases.
Here at SmartSearch, we know that every business has its own unique AML needs, which is why we tailor our pricing to your operations. When you get in touch about our all-inclusive AML solutions, we offer bespoke quotes based on your AML capacity, budget and ongoing monitoring requirements.
To test our platform's capabilities for yourself, request a free demo today, or get in touch today to discuss our pricing and explore how we can help streamline your AML operations and save you money in the long run.