KPMG anti-money laundering audit (AML audit)

Rising expectations amid new regulations to combat money laundering. Financial institutions will need to be even more thorough in their analyses.

The regulatory environment in the area of compliance with money laundering rules has become more international, more dynamic and more continuous. Combined with increasingly demanding and complex customer behavior, financial institutions face significant challenges in combating money laundering and the financing of terrorism.

KPMG’s AML tools support financial institutions in assessing risks related to combating money laundering and terrorist financing. The tools provide:

Real-time insights on high-risk profiles, and
comprehensive views down to the individual customer level.

Adrian Huser

Partner, Financial Services, Audit Banking

KPMG Switzerland

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Combating money laundering is an ongoing challenge for financial institutions

Regulation to combat money laundering and terrorist financing has increased significantly, placing ever greater demands on financial institutions in particular. The provisions below are some of the latest changes encouraging financial institutions in Switzerland to conduct in-depth risk analyses:

Revised Swiss Anti-Money Laundering Act (AMLA), in force since January 2023, and the partially revised Ordinance of the Swiss Financial Market Supervisory Authority FINMA (AMLO-FINMA), effective since January 2023
FINMA Guidance “Money laundering risk analysis pursuant to Article 25 para. 2 AMLO-FINMA” (FINMA Guidance 05/2023, August 2023)
Upcoming revision of the Swiss banks’ code of conduct (CDB 20) with regard to the exercise of due diligence, effective from 2027 at the earliest

The market environment is increasingly dynamic and complex. Especially with frequent updates to economic sanctions and embargoes, demanding both proactive sanctions screening and robust third-party risk management.

Financial institutions must implement these changes quickly to avoid serious reputational damage. In addition, the regulatory focus is increasingly on risk appetite, which demands structured risk monitoring.

Structured insights on beneficial ownership information facilitate transaction monitoring, AML screening, and the documentation of customer activities, essential for maintaining accurate and up to date compliance records.

How can financial institutions effectively address risks in this environment?

All of these factors require a multifaceted, risk-based approach. Financial institutions must consider a broad spectrum of information when assessing the risks in customer relationships. Additionally, they must ensure that risk assessments are always current.

These requirements impact not only financial institutions. KPMG, as an audit firm, must also comply with a specific FINMA catalogue, focused on combating money laundering and terrorist financing, when executing audits.

Sample based review of business relationships and transactions are central to the regulatory audit. And a robust audit opinion is only possible if they focus on the relevant risks.

KPMG’s solution built around powerful tools

KPMG AML Audit D&A Dashboard

To meet regulatory requirements, adapt to the market environment, and comply with audit standards, KPMG has developed a sophisticated tool:

The KPMG AML Audit D&A Dashboard ("AML" for "Anti-Money Laundering," "D&A" for "Data & Analytics").

This tool benefits both regulatory audit clients and advisory clients. With the dashboard, KPMG provides targeted and effective support for monitoring risks.

The newly developed dashboard combines two powerful success factors:

KPMG’s extensive experience in combating money laundering and terrorist financing
Best practices in the Swiss financial market

This tool enables an analytical view of a financial institution’s entire customer structure, even when only limited customer data is available. It is also fully scalable, integrating compliance risk indicators and transaction data.

The KPMG AML Audit D&A Dashboard provides a complete overview of customer risks related to money laundering. Thanks to predefined D&A routines, users gain a holistic view of both the entire customer base and individual customers, ensuring accuracy in every portfolio analysis. The D&A routines link customer and transaction data, offering in-depth insights into customer behavior.

Additionally, with the K-3PID tool, an independent view of each customer can be obtained in just minutes.

K-3PID tool

The real, in-depth analysis begins once potentially risky areas or customer groups have been identified. KPMG’s forensic specialists have developed the Third-Party Intelligent Diligence Solution (K-3PID) especially for this purpose. It searches a wide range of open sources, including structured data sources, direct search websites, the open web, media, corporate registries, sanctions lists and data aggregators. The tool works quickly, creating a detailed risk profile, including politically exposed person (PEP) background, of the customer within minutes.

K-3PID has proven highly effective and, when used with the dashboard, ensures comprehensive coverage.

If needed, KPMG forensic experts—available in over 90 language regions—can assist with comprehensive risk reports. They participate in in-depth investigations for individual cases or entire customer groups, with access to over 60,000 data sources from KPMG’s global network.

Features of the KPMG AML Audit D&A Dashboard at a glance

Financial institutions can run the KPMG AML Audit D&A Dashboard on their own systems.
The dashboard meets the audit requirements of FINMA and EXPERTSuisse.
The “KPMG Audit Score” provides valuable insights into money laundering risks across customer bases.
The deep-dive function enables detailed analysis down to the individual customer or specific transaction level.

Advantages of the KPMG AML Audit D&A Dashboard

The algorithms and routines are the result of years of experience, specialized knowledge and the latest market standards.
The dashboard provides a vertical view of customer-specific risk factors by analyzing each customer’s characteristics and activities.
Risk factors can be analyzed in a targeted manner at any time. Whether at the level of the financial institution, customer group, individual customer, or transaction.
Benchmark data enables an independent risk assessment of customer relationships as well as an independent view of the actual customer risks.
Risk trends and measures can be tracked across defined timeframes.
The dashboard can be used as part of the audit in a variety of ways. For example, in risk analysis, test of operating effectiveness, substantive audits, or analytical testing of the risk appetite.

The tool enables a data-driven audit that eliminates chance in samples and makes the audit itself more effective.
The complex mass of data is analyzed in full, leading to an impressive analysis report with a clear and simple structure.

Potential dashboard users represent a diverse group, from banks and portfolio managers to trustees and investment firms. KPMG can use the dashboard with all clients, both in audit and other specific engagements. The KPMG dashboard is suitable for all financial institutions and can be tailored to any customer base.

In a nutshell

The KPMG AML Audit D&A Dashboard helps in:

Independently assessing the relevant risk classification model
Presenting the risks of the entire customer portfolio independently and clearly
Identifying individual customer groups and risk clusters for in-depth analysis
Preparing data for event-related focus topics such as sanctions or leaks

Partnering for success: now is the time analyze the risks in your customer base

Don’t hesitate – now is the time to get an independent and in-depth overview of the risks in your customer base. Would you like to learn more about KPMG’s audit tools for combating money laundering and terrorist financing?

We’re here for you. Our experts will be happy to answer your questions and respond to any suggestions or comments you may have.