Importance of AML Screening Software For Businesses | SMART Infotech

Politically Exposed Persons have to be identified & screened in companies as they pose many financial fraud risks. AML-TRACE performs PEP Screening, which helps you keep all such dangers at bay.

PEPs are high-risk clients who have access to more potent opportunities than ordinary citizens to acquire assets via illegal means like money laundering & taking bribes. For the most effective AML compliance to become possible, it is crucial to identify PEPs & determine their risks. This is generally referred to as PEP list screening.

• Use of standardized data for AML name screening by AML-TRACE

Complete & reliable electronic customer data records are the basis for effective PEP screening. Without accurate unique identification data, PEP screening will not serve its purpose. The eventual results arrived at based on this data will be irrelevant & inconsistent. Here, we lay out the minimum information that all companies need to keep a record of so that an effective PEP screening is made possible:

1. Full Name

2. Year or Date of Birth 

3. Gender

4. Country of political exposure

5. The date PEP left its post

6. Politically exposed roles, appointment dates, & years

• Need for periodically screening existing customers against PEP Lists

Certain precautions & procedures are applied in customer purchases to determine if a customer is a PEP. This is the first step in PEP screening. But this one-time screening isn’t enough. Combined with AML sanctions screening, this process needs to be followed regularly, regularly and periodically. 

However, there is no defined period for all kinds of enterprises. The specified period depends on the customer screening needs of the particular organization.

• Why must PEP Screening be performed periodically?

The customer risks keep changing, both in terms of type and quantity. Periodically carrying out this process makes changing risk levels possible. This is important to place PEPs inappropriate risk categories.

• PEP risk management process

1. Identification of new customers

All companies must adopt risk-based procedures to identify if a customer is a PEP before or right after establishing the relationship. But note that these procedures must be in accordance with applicable laws.

Once a new client is designated as a PEP, companies must use appropriate due diligence measures to see whether the person lies in low-risk, medium-risk, or high-risk categories.

An AML screening software like AML-TRACE also implements risk-based due diligence & controls on the existing customers who are becoming PEPs.

2. Assessment of customer risk

After identifying a new or existing customer as a PEP, a risk assessment of clients must be performed by companies to ascertain the financial crime risk level posed by that client. Accordingly, appropriate levels of due diligence & monitoring should then be established. 

Risk factors like business type, product, and geography must be considered to make risk assessments accordingly. While determining geographical risks, all companies should only consider data from reliable & independent sources in the country of political exposure.

Reap the benefits of AML name screening, AML sanctions screening, & enhanced AML monitoring. Use AML-TRACE NOW!