How RegTech Orchestration Layers Unify Legacy and Cloud AML Controls

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An exclusive article by Fred Kahn

The world of anti-money laundering (AML) compliance is evolving at a rapid pace, but many financial institutions remain caught between old, inflexible systems and newer, agile cloud-based tools. Regulatory expectations for end-to-end monitoring, real-time risk scoring, and effective customer due diligence have never been higher. At the same time, many firms struggle with fragmented controls, manual processes, and significant operational risk stemming from their mix of outdated core banking solutions and modern cloud-based applications.

RegTech orchestration layers are now emerging as the critical connective tissue between these disparate systems. By automating workflows, aggregating data, and creating a unified compliance environment, orchestration platforms are reducing the risk of gaps, overlaps, and errors that expose firms to regulatory action and financial loss. This article explores the drivers behind orchestration in AML, the technology foundations, practical integration strategies, regulatory requirements, and the evolving future of automated compliance.

The AML Compliance Challenge: Fragmented Systems and Manual Gaps

Financial crime compliance departments face a daunting reality. On one side, legacy transaction monitoring engines, core banking databases, and in-house case management solutions keep essential client data and risk events locked in outdated formats. On the other, banks and fintechs are adopting next-generation solutions: cloud-native analytics, AI-driven risk scoring, customer onboarding tools, and SaaS-based case management platforms. While these new tools promise agility and insight, few institutions can fully replace their legacy stack overnight.

The result is a patchwork of systems with limited interoperability. Manual processes bridge the gap—exporting data, transforming formats, emailing files, and tracking alerts with spreadsheets. This increases operational risk, creates blind spots, and hinders the holistic view required for modern AML compliance. Regulators are increasingly scrutinizing these integration issues. The European Union’s AML Directives, the United States Bank Secrecy Act (BSA), and guidelines from the Financial Action Task Force (FATF) all stress the need for comprehensive, consistent, and real-time monitoring across business lines and geographies.

Operational challenges multiply in organizations with multiple lines of business or global operations. Mergers, acquisitions, and new product launches often introduce even more systems, further increasing complexity. Without a unifying technology layer, compliance teams spend valuable time resolving technical disconnects instead of focusing on risk mitigation.

Technology Foundations of AML Orchestration Platforms

Orchestration platforms work by creating a “meta-layer” above existing systems. Instead of replacing every legacy component, orchestration enables institutions to keep critical infrastructure in place while automating processes, normalizing data, and providing end-to-end oversight. The core features of orchestration platforms include:

API Integration: Securely connecting disparate applications, both legacy and cloud-native, via standardized application programming interfaces (APIs).
Workflow Automation: Defining, triggering, and automating complex AML processes such as alert triage, case assignment, and regulatory reporting.
Data Normalization: Harmonizing data from multiple sources into a unified, actionable format, regardless of underlying technology or data model.
Centralized Oversight: Providing a single point of control for compliance monitoring, policy updates, and exception handling across all systems.
Audit and Traceability: Capturing a detailed, time-stamped audit trail of all actions and decisions, supporting regulatory examinations and internal reviews.

A modern orchestration layer leverages cloud-native technologies to ensure scalability, flexibility, and real-time performance. Event-driven architectures, containerization, and secure hybrid-cloud connectivity enable seamless integration with both on-premises and SaaS applications. Many orchestration platforms also include built-in connectors for common AML, KYC, and fraud detection solutions, further accelerating deployment and reducing customization overhead.

AI and machine learning models are increasingly embedded within orchestration workflows, helping prioritize alerts, detect anomalies, and adapt to emerging threats. However, the focus is on explainable automation—ensuring that compliance teams can review, validate, and adjust decision criteria as needed.

Practical Integration: Strategies for Bridging Legacy and Cloud AML Controls

Adopting an orchestration approach starts with a comprehensive assessment of existing systems and AML processes. Successful integration strategies include:

Mapping Data Flows: Cataloguing the movement of customer, transaction, and risk data across all systems, identifying manual touchpoints and redundant processes.
Identifying Gaps and Overlaps: Pinpointing areas where fragmented controls create risk—such as missing sanction screening for certain business lines or duplicate alerting across platforms.
Building Modular Integrations: Implementing API-based connectors and data adapters to link legacy databases with modern AML solutions. Where APIs are unavailable, secure file transfers or robotic process automation (RPA) can bridge the gap temporarily.
Automating Critical Workflows: Defining rules for alert escalation, case assignment, SAR (Suspicious Activity Report) preparation, and regulatory filings, automating routine steps wherever possible.
Testing and Validation: Running parallel operations to compare outputs between manual and orchestrated workflows, ensuring accuracy and regulatory alignment.
Continuous Monitoring: Leveraging dashboards and real-time analytics to monitor integration health, process completion rates, and emerging compliance risks.

Change management and staff training are vital components of successful orchestration projects. Compliance teams must understand the logic, boundaries, and exceptions embedded within automated workflows, remaining empowered to intervene or escalate issues when necessary.

Many financial institutions opt for a phased approach, beginning with high-impact areas such as transaction monitoring or sanctions screening, then expanding orchestration to customer onboarding, adverse media checks, and periodic risk reviews.

Regulatory Requirements Shaping Orchestration Layers

Global AML regulations are increasingly explicit about the need for comprehensive oversight across all relevant systems. Recent guidance and legislative updates illustrate the regulatory direction:

European Union AML Directives (AMLD 5 and 6): Emphasize consistent, group-wide policies and procedures, including the integration of monitoring systems across all branches and subsidiaries. Regulatory technology is highlighted as a way to support unified compliance efforts.
United States Bank Secrecy Act (BSA) and FinCEN Guidelines: Require covered institutions to maintain effective, risk-based AML programs capable of detecting and reporting suspicious activity across products and services. Guidance stresses the importance of timely, accurate, and complete data aggregation.
Financial Action Task Force (FATF) Recommendations: Call for financial groups to ensure AML controls are applied consistently, including the use of technology to address fragmentation and manual process risks. FATF’s Digital Transformation Guidance encourages regulated entities to adopt advanced regtech tools while ensuring oversight and explainability.
Monetary Authority of Singapore (MAS) Notice 626: Mandates real-time screening and ongoing transaction monitoring, with technology integration cited as essential for effective control.

Supervisors are scrutinizing institutions that rely on disconnected, manual processes, often finding deficiencies that lead to enforcement actions or significant remediation programs. Orchestration layers are increasingly recognized as a best practice for achieving the unified, proactive, and auditable controls demanded by modern regulations.

The Future of AML Automation: Trends and Considerations

The momentum behind orchestration in AML compliance is only accelerating. As financial services move toward real-time payments, embedded finance, and digital assets, the need for continuous monitoring across ever more complex environments is intensifying. Key trends shaping the future include:

Cloud-Native Orchestration: With more core systems migrating to the cloud, orchestration platforms are evolving to manage hybrid and multi-cloud architectures, providing centralized oversight no matter where data resides.
Vendor Ecosystem Expansion: An expanding marketplace of pre-built connectors, open APIs, and regtech plug-ins is making integration faster and more flexible, reducing the burden on IT departments and lowering deployment costs.
Increased Regulatory Focus: Supervisors are issuing more detailed expectations for automated compliance, particularly around auditability, governance, and real-time monitoring. Institutions failing to modernize face higher regulatory risk.
Human-in-the-Loop Controls: The most effective orchestration strategies combine automation with expert review, ensuring that high-risk or ambiguous cases receive the necessary attention while routine alerts are processed efficiently.
Cross-Border Harmonization: As global regulatory frameworks converge, orchestration layers can help multinational institutions implement consistent controls and reporting, reducing the risk of country-specific blind spots or process gaps.

Despite these advances, challenges remain. Data privacy, cybersecurity, and third-party risk management are central considerations. Institutions must ensure that orchestration platforms meet rigorous standards for encryption, access controls, and resilience. Transparent governance and documentation are critical to maintaining regulatory confidence.

Conclusion: Orchestration Layers as the Engine of Modern AML Compliance

The shift toward orchestration layers is redefining how financial institutions approach AML compliance. By bridging the gap between legacy and cloud-native systems, orchestration platforms enable a level of automation, oversight, and flexibility that manual processes simply cannot match. Institutions adopting this approach are better positioned to manage regulatory expectations, control operational risk, and respond swiftly to evolving threats.

As the regulatory and technology landscape continues to evolve, orchestration is poised to become the foundation of effective, scalable AML compliance. Institutions that invest in robust, well-governed orchestration layers will gain a strategic advantage—transforming their compliance functions from reactive cost centers into proactive engines of risk management and business enablement.

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