Between the Lines: The Hidden Battle of AML Screening

There is no easy setting when it comes to customer screening.

If you tune too tightly, a true match slips through and the regulator will ask why.

If you loosen the rules, your team drowns in noise and meaningful risk is buried under a large volume of false positive alerts.

Somewhere in the middle lies a configuration that might work, but your system will not tell you where that is. Neither will your KYC solution vendor.

Welcome to the ambiguous world of AML screening, the space between precision and chaos where every compliance team eventually finds itself. It is here, in the middle ground, that the strength of an AML program is tested. Not by its written policies, but by the judgement of those who keep it running.

The Balancing Act Nobody Enjoys

Let’s say what everyone knows but rarely says: there is no perfect screening threshold.

Every calibration choice is a trade-off between efficiency and exposure. Tuning a system is not like focusing a microscope, it’s like stacking blocks on uncertain ground.

Open the filters wide and you get more alerts, more coverage and more exhaustion. Your dashboards look impressive, but your analysts are fatigued and error rates climb.

Narrow the filters and the noise quiets down until something significant slips through and you’re left explaining why it was missed.

Neither choice is ideal, but that tension is exactly what risk-based compliance means. The goal is not perfection, but informed decision-making anchored in your business’s money-laundering and terrorism financing risk profile, your control design and your operational capacity.

There is no magic number. Only trade-offs you acknowledge and own.

When the System Becomes the Risk

Many compliance teams work with screening tools that are powerful in theory but opaque in practice. Algorithms built on fuzzy logic, weighted scoring and adaptive matching are impressive until something goes wrong and no one can explain why.

When a legitimate name doesn’t match, or a false hit slips through, the answer from the vendor often sounds like a shrug in code. You are left carrying maximum accountability with minimal visibility.

The irony is that these systems are sold as ways to reduce risk, yet when the time comes to defend a decision, they can make the organisation more vulnerable.

And the damage is not only regulatory. It seeps into culture.

The Culture Cost of Alert Fatigue

Alert fatigue is not just an operational problem. It’s a cultural one. When everything looks like a potential threat, the human element of compliance starts to break down.

Talented analysts leave because they want to use judgement, not close duplicate alerts all day. Remaining staff spend more time managing queues than understanding risk.

Escalations become box-ticking, urgency fades and decision quality drops.

Eventually, you don’t just have a system problem. You have a people problem. One that no amount of technology can fix.

A strong compliance culture comes from giving people signals they can trust, tools they can understand and the space to apply professional judgement. The good news is that there is a way to climb out of firefighting mode. It begins with ownership, transparency, and feedback.

Turning the Grey Zone into Insight

1. Take Ownership of Calibration Decisions: Document not only your settings but your reasoning. Explain how each threshold connects to your risk assessment, your business model, and your capacity. When something goes wrong, a documented rationale. Even an imperfect one shows you considered the risk and made a reasoned choice. That difference between deliberate judgement and unthinking default can shape the outcome of an audit or regulatory review.

2. Demand Clarity from Your Vendors: If your system cannot explain why it matched or missed a name, that is not a configuration issue, it is a transparency issue. Push your vendor for explanations in plain language. Ask which parameters are adjustable, what weighting logic is applied and how upgrades have changed the algorithms.

Request reports you can actually interpret. Audit-readiness depends as much on being able to explain your tools as on the alerts themselves.

A practical step: schedule an annual “check and challenge” session with your vendor.

Revisit features that were disabled at go-live or deferred during previous upgrades.

Sometimes better performance is already built in and it just has not been switched on.

3. Build Feedback Loops Within Your Team: If you are closing the majority of alerts as false positives, that is not a nuisance statistic, it is data waiting to be used.

Track it. Analyse it. Feed it back into your calibration cycle. Otherwise you are not improving, you are just surviving. The insights of analysts are often the most accurate calibration signals you have. Which brings us to the final, most human piece of the puzzle.

4. Give Analysts a Voice: Your analysts know what works and what doesn’t. They see the broken logic, the recurring false positives, and the workarounds that no one writes down.

Invite them into calibration discussions not as end-users, but as contributors. Let them question assumptions. A team that participates in shaping the system will defend it with conviction. If your analysts stop believing in the process, they will stop believing in the purpose.

A Perspective from Agentic AML

We operate in the same uncertainty our clients face. We help teams that are overwhelmed by false positives, challenged by black-box technology, or simply unsure whether their screening configuration aligns with their risk profile.

Sometimes our work means defending past calibration choices; sometimes it means helping rebuild them from the ground up. Either way, the goal remains constant: to create systems that empower people to detect risk rather than systems that people must work around.

Because screening platforms do not catch criminals — people do.

The technology’s role is to amplify their capability, not smother it.

Final Reflection: Navigating the Grey with Eyes Open

Risk-based compliance will never be perfect. It will always involve difficult, sometimes uncomfortable trade-offs.

But progress lies in awareness, knowing why a decision was made, being able to explain it and being willing to revisit it when conditions change.

If your current system keeps you in the dark, you are not alone. Many organisations feel trapped inside the same black box.

What matters is choosing not to stay there. The grey zone is survivable and even productive when you understand it, document it and own it.

The future of screening is not about eliminating uncertainty. It is about mastering it.