The Top 10 AML Challenges for Banks
What are the top current challenges for AML compliance teams? Hawk’s latest report with Celent asked banking compliance leaders to share what is keeping them awake at night.
[Read the full report for more detail on the challenges faced and how those challenges are being overcome.]
1. AML’s Growing Pain: Analyst Shortages Threaten Effectiveness
By far the most pressing issue? Finding and keeping AML analysts.
With 77% of respondents citing staffing as a top challenge, it's clear that workloads are growing faster than the workforce. Manual reviews, mounting caseloads, and a shortage of skilled professionals are putting pressure on banks to accelerate automation where possible and allow analysts to focus on the most valuable parts of the work. AML and fraud convergence can help, as it enables existing personnel to be deployed more efficiently without scrambling to hire 20 highly trained analysts overnight. And AI is a game changer for reducing false positives and helping analysts to reduce investigation time.
2. False Positives Fuel Analyst Burnout and Raise Compliance Risk
Closely tied to staffing woes, false positives remain a major burden for 40% of the banks and credit unions we surveyed. When systems flag legitimate transactions as suspicious, analysts spend hours sifting through dead ends. Not only does this create compliance risk through operational strain, but it also increases the likelihood of burnout and errors. AI is enabling financial institutions to liberate themselves from high volumes of false positives – Hawk customers are seeing an average of 70% false positive reduction.
3. Old Systems, New Problems: How Legacy Tech Fuels Inefficiency in AML
Of our respondents, 30% are still running their AML systems on legacy infrastructure that struggles to keep pace with current needs. These outdated platforms often contribute to poor data integration and high numbers of false positives, making modernization a top priority. Hawk provides the AI-powered modern AML system that banks need for maximum efficiency and effectiveness. Alternatively, our AML AI Overlay sits on top of your existing system giving you all the benefits of AI without the need to rip and replace your systems.
4. Machine Learning in AML: Progress Stalls Without the Right Partners and Guidance
While the promise of AI in AML is real, deploying and maintaining machine learning models can be a challenge. A third of banks (33%) say model development is among their top challenges, underscoring the need for specialist technology partners that can help you to get this right.
5. The Struggle to Source Quality KYC, KYB, and Sanctions Data is Real
Accurate, up-to-date data forms the foundation of an effective anti-financial crime program. But 33% of banks and credit unions report difficulties sourcing and maintaining these datasets, which has a knock-on effect on risk ratings. Partnering with a technology provider that offers continuously updated sanctions screening lists can help institutions stay compliant, reduce manual effort, and respond more confidently to evolving regulatory demands.
6. Outdated Rules, Evolving Threats: 23% Say Tuning Is a Major Challenge
Rules-based systems are still the backbone of many AML programs. Updating rules to reflect shifting crime typologies requires constant attention. Nearly a quarter of banks struggle with rule tuning, especially as financial crime becomes more sophisticated. Hawk’s no-code rule set-up enables financial institutions to fine-tune rules without relying on vendors - saving time and costs.
7. Scaling AML Without Breaking the Bank: A Growing Challenge
AML compliance is expensive. 23% of banks say cost containment is a significant hurdle and finding ways to scale programs efficiently without compromising effectiveness is an ongoing challenge. This is where convergence of AML and fraud can help – the report also found that 50% of banks that have pursued a FRAML approach have recorded savings exceeding US$5 million.
8. Synthetic Identities, Automated Fraud — AI Is Changing the Crime Game
Criminals are leveraging AI to evade detection, from creating synthetic identities to automating money movement. One in six banks (17%) now identifies AI-powered adversaries as a top threat. Expect that number to keep growing.
9. Regulatory Pressure Mounts: 17% Are Struggling to Keep Up
Evolving regulations combined with more aggressive enforcement and limited resources make compliance a moving target that many banks find hard to hit consistently - no wonder 17% of respondents cite it as a top challenge. The stakes are high: fines, enforcement actions, and reputational damage are all possible.
10. Financial Crime Fighters Need Agility: Adapting to New Crime Types
Financial crime is constantly changing shape. While ‘only’ 7% of banks cited keeping abreast of new typologies as a top concern, it speaks to the need for programs that can adapt quickly, through agile policy updates and real-time data analytics.
Hawk: For the Next Level of AML
Hawk’s anti-financial crime platform provides an AI-enabled holistic solution for AML, screening and fraud to banks, credit unions and payment companies that need to meet the challenges of limited resources, rising risk complexity, and mounting regulatory demands. Find out more about how we can help you to increase your risk coverage and improve your operational efficiency.