Build, buy or outsource your AML compliance: what’s right for your business?

Build

• Have the financial capacity, technical expertise and personnel to design, implement and maintain a custom AML system
• Are willing to make a significant upfront investment in developing an in-house AML system

Buy 

• Prioritise client experience
• Seek long-term cost efficiency
• Operate across multiple offices, service offerings or jurisdictions
• Value internal compliance expertise
• Want to closely manage their risk 
• Have bespoke compliance processes or want flexibility in onboarding processes

Outsource

• Don’t mind external parties engaging with their clients
• Are resource-constrained
• Have limited regulatory complexity
• Have minimal experience in managing regulatory risks
• Apply a standard onboarding process for all clients

Build

High Cost and Resource Demand

Developing and maintaining a custom AML system requires significant financial investment and ongoing IT, compliance and security resources.

Compliance Risk

Keeping up with frequent regulatory changes across jurisdictions demands constant updates and in-house expertise, increasing compliance risk.

Data Security

Requires full control and responsibility of sensitive client information and compliance records.

Customisation

Allows for 100% customisation to match unique compliance workflows and risk models but brings the need for dedicated resource to keep it up to date.

Additional Strategic Considerations

• Does a custom AML system provide a strategic edge, or is AML compliance a non-differentiating function best handled by specialist software?
• Will in-house development improve client trust, speed or compliance efficiency, or will it drain resources from core business growth?
• Does building in-house provide more control and flexibility, or does it create technical debt and future scalability issues?
• Will AI, biometrics and automation trends make self-built solutions obsolete before they generate ROI?

Buy

Technology Advantage

Modern compliance platforms significantly reduce the traditional burdens of in-house AML processes

Control

Keeping processes in-house with technology support provides better control over the client experience

Efficiency

Automation handles routine tasks, allowing staff to focus on complex cases

Cost Structure

The platform-based approach can be more cost-effective at scale

Data Management

Better control over sensitive client information

Integration

Deeper integration possibilities with existing firm systems

Outsource

Technology Dependency

Reliance on external provider's technological capabilities and update cycle, with limited direct control over technological evolution and customisation

Control Limitations

• Reduced direct oversight of client interactions and compliance processes
• Potential friction in client experience management
• Less flexibility in adapting compliance approach

Efficiency Trade-offs

• Potential delays in handling complex cases
• Standardised processes may not accommodate unique organisational requirements

Cost Considerations

Predictable but potentially higher ongoing external service costs

Data Management

• Increased vulnerability in data transmission
• Less direct control over sensitive client information management

Integration

Limitations on what can be integrated 

Additional Strategic Considerations

• Dependency on third-party provider's expertise and reliability
• Potential loss of internal compliance knowledge development
• Reduced ability to develop proprietary compliance approaches
• Increased vendor management overhead
• Outsourcing essentially trades direct control, customer relationships, risk management and customisation for standardised compliance processes.

Outsource

Minimal
Leverages existing systems and expertise

Build

• Variable. No platform fee / subscription, but ongoing spend for development, upkeep and enhancements.
• Harder to predict and control compared to a contract or service fee
• Variable data costs based on volume

Buy

• Fixed platform costs with data cost variation based on volume.
• Locked in via contracts

Outsource

• Fixed monthly service fee, fixed per case cost and often a fixed data type cost. 
• Service cost is subject to the provider’s discretion

Build

Variable

• No subscription, but high development and maintenance costs
• Ongoing spend on staff time, updates, testing and compliance tweaks
• Costs grow as your system and needs expand

Buy

Predictable and controllable 

• Software subscription
• Data usage costs 
• Staff time on implementation, maintenance, and support

Outsource

Variable

• Usually on a pay-per-case basis.
• Can become expensive with high volumes.
• If charged hourly, rates can differ by level of expertise.

Build

No vendor lock-in; full ownership, but tied to your internal teams.

Buy

Contractual lock-in common; exit fees or data migration costs.

Outsource

Strongest lock-in risk; switching may mean onboarding a new provider mid-cycle.

Buy

Complete

Direct communication with clients through white-labelled technology

Outsource

Partial

Third-party interacts with clients for document collection

Build

Very high 

Full control over quality standards, but consistency relies on robust design and upkeep.

Buy

High 

Can customise automated workflows and requirements to match your risk appetite and processes.

Outsource

Low

Must adapt to the provider's processes, deviations from the process may incur additional costs.

Build

Set your own standards and checks, but quality depends on your team’s build and upkeep.

Buy

Consistent quality through automated processes and mandated requirements with human oversight. 

Outsource

Dependent on the third party’s standards

Build

High
Extensive training needed for developers, compliance teams and frontline staff to build, use, maintain and improve the system.

Buy

Minimal - Medium 

Modern platforms are intuitive and include training resources specific to AML professionals. However, frontline staff may require more training.

Outsource

Minimal

Basic training on how to engage the service

Build

All expertise must be developed or sourced in-house.

Buy

Built-in AML expertise through technology with automated guidance

Outsource

Access to specialist AML knowledge varies by provider

Build

• Heavy internal resource use for building, testing and updating
• Automation handles routine AML tasks, staff focus on exceptions 
• Still need an internal MLRO / AMLCO for oversight and approvals

Buy

• Automation handles routine tasks, staff focus on exceptions 
• Legally required to have an internal AMLCO for oversight and approvals

Outsource

• Diverts some resources to managing the provider relationship.
• Legally required to have an internal AMLCO for oversight and approvals

Build

Full responsibility sits with you.

Buy

All customer data is and remains your property, the software provider is simply a data processor and full risk and liability remains with you.

Outsource

All customer data is and remains your property, the third party is simply a data processor and full risk and liability still sits with you.

Build

 System performance and fixes rely on your team’s capacity and priorities.

Buy

Flexible to your needs and priorities

Outsource

Varies with third party’s workload and/or SLA

Operations

Scalability

Build

Variable 

Can scale with good design, but needs ongoing investment to handle higher volumes smoothly.

Buy

High 

The technology handles increased volume automatically but may be constrained by internal staff capacity

Outsource

Medium

Likely face provider capacity constraints at peak times

Build

 High 

• Design your own detailed logs and reports.
• Output quality depends on how well you build and maintain audit features.

Buy

 High 

• Automated logging of all actions and decisions.
• Easily accessible.

Outsource

Medium

• Usually includes audit trails but may be less detailed.
• May be difficult to get detailed reports from the service provider.
• Requires constant oversight and audits to ensure quality control. 

Build

Very high 
Full freedom to change workflows, rules and risk settings whenever needed - but relies on your team’s time and capacity.

Buy

 High 

Can quickly adjust processes, workflows, risk appetites and requirements through platform settings.

Outsource

Low

Changes must be coordinated with the provider, assuming they allow changes to the master services agreement.

Build

 Strong 

 You design all rules and controls to fit your exact risk appetite - but need ongoing updates to stay compliant.

Buy

 Strong 

Settings and automation ensure consistent application of rules and approaches to match risk appetite

Outsource

Medium

• Master services agreement is generic to meet the needs of multiple firms.
• May not align to your risk appetite.

Build

 Manual

 Manual updates needed to meet new rules. Speed depends on your team’s responsiveness. Manual updates needed to meet new rules. Speed depends on your team’s responsiveness.

Buy

 Automated

Via platform updates aligned to meet regulatory changes

Outsource

Unknown

• Reliant on the provider changing their process to meet regulatory updates
• The speed of update may be limited by time spent on new processes, training etc.

Build

 Slow 

• Requires design, development, testing and rollout

Buy

 Fast 

• Off-the-shelf with configuration.

Outsource

Immediate

• Provider starts working as soon as onboarding is complete.

Build

 Variable 

• Full control - security depends on your own infrastructure and governance.

Buy

 High 

• Relies on your approach to security.
• Software is usually ISO27001 compliant at a minimum.

Outsource

Unknown

• Relies on the provider’s approach to data security and their staff’s approach to physical security (access to the stored data)

Build

 Fully customisable - build as many integrations as needed, but requires time and developer resources.

Buy

Software-dependent.

Outsource

Provider-dependent:

• IT capabilities
• Size of your contract
• Value of your brand to them.

Build

•  System runs 24/7, but technical support and fixes rely on your team’s availability. 
• After-hours AML support depends on your team’s availability.

Buy

• Software available 24/7

Outsource

Limited out-of-hours service but can be included with higher-value monthly agreements.

Build

High

Can be designed for global reach and multi-language support, but it depends on budget and integrations.

Buy

High

Modern platforms connect to global registries and often include multiple-language support

Outsource

Medium

Limited to local market with access to global data services. May incur additional costs for global coverage.