Building the Foundation for AML Modernization: Insights from Industry Leaders

In today’s rapidly evolving financial landscape, innovation and strong leadership are redefining how institutions prevent, detect, and respond to financial crime. As technology continues to rapidly evolve, regulatory change and pressure intensifies and criminals adopt increasingly sophisticated tactics, institutions are focused on how best to innovate around data, analytics, and AI or machine learningto stay ahead. 

In the first session of our “Modernizing AML” webinar series, I was joined by Alejandro (Alex) Sardinas, VP, Regulatory Risk Optimisation Manager at Ocean Bank, and Vic Maculaitis, Founder & Managing Partner at i3strategies. Together, we explored what it really takes to lay the groundwork for AML modernization in today’s challenging environment. 

If you missed the live session, you can watch it on demand. 

Below, I share the most important lessons and practical advice from our conversation. 

1. Modernization starts with leadership and strategic alignment 

Both Vic and Alex emphasized that successful AML transformation isn’t just about technology; it’s about leadership, structure, and vision. The most effective programs are those where the Chief AML Officer (CAMLO), or equivalent, has a clear mandate, direct access to the Board, and the authority to impact and drive change across the institution. 

Key takeaway:  Before pursuing new tools or technology, ensure that you—and your organization—have built an operating model that gives AML leaders the authority to shape strategy and champion innovation. 

2. Be Proactive and don’t wait for a regulatory push 

Too often, change in AML is driven by regulatory findings or consent orders. But as Vic pointed out, a “clean” program doesn’t mean there’s no room for improvement. The best institutions are those that proactively seek efficiency and effectiveness, not just compliance. 

Key takeaway: Shift your mindset from “compliance-first” to “optimization-first.” Ask: How can we do more with less? How can we deliver better results for our stakeholders and law enforcement? How do we partner with our regulators to ensure that reducing noise and finding more risk doesn’t result in regulatory issues? 

3. Map your processes before you buy technology 

Alex shared Ocean Bank’s journey: before considering any new technology, they mapped out every process, quantified where time and resources were spent, and identified the true pain points. Only then did they look for technology that addressed those specific needs. 

Key takeaway: Don’t let buzzwords or vendor hype drive your strategy. Start with a granular understanding of your own processes and challenges, then seek technology that fits. 

4. Engage regulators early and communicate with confidence 

Innovation can be daunting, especially when it means uncovering new risks or moving away from legacy systems. Both panellists stressed the importance of transparent, proactive communication with regulators bringing them along on the journey, sharing your plans, and demonstrating confidence in your approach. 

Key takeaway: Use guidance—such as the Wolfsberg Group’s Statements on Effective Monitoring for Suspicious Activity Part I, Part IIand U.S. regulators—to support your case. Regulators are increasingly open to approaches when institutions show strong planning, clear ROI, and a commitment to compliance and effectiveness. 

5. Data quality matters but don’t let “imperfect” data hold you back 

No institution has perfect data. But as Alex noted, waiting for flawless data before starting your AI or machine learning journey is a mistake. Many modern technologies can help enrich, clean, and make sense of your existing data. 

Key takeaway: Focus on continuous improvement. Leverage technology partners who can support your data and technology journey, including the growth of your institution, not just sell you a product that only fixes today’s issues 

6. Futureproofing means modularity and flexibility 

Vendor lock-in and monolithic systems are a thing of the past. Both Vic and Alex advocated for a modular approach. Do this by selecting best-in-class technologies for specific use cases and maintaining the flexibility to adapt as needs evolve. 

Key takeaway: Build your AML program like a toolkit, not a fortress. Modular, open platforms will help you stay agile and ready for whatever comes next. 

Confidence, collaboration, and continuous learning 

Modernizing AML is a journey, not a destination. It requires strong leadership, a willingness to challenge the status quo, and the courage to innovate even when it’s uncomfortable. Collaboration, both within your institution and across the industry, is key. Learn from your peers, engage with regulators, and never stop asking how you can do better. 

To find out more about Alex, Vic and other AML experts and their journeys, dive into our Human Side of AML series and sign up to watch part 2 of Modernizing AML where we’ll dive into operationalizing these strategies with Sarah Beth Felix and Becky Robertson.