AML Compliance – Guarding Businesses from Financial Frauds

The modern era of technological advancements does not only, majorly account for the ease it has brought to the world, but also for the detrimental impacts it has incurred. Where digitization has optimised the business processes, it has also paved ways for the criminals to swoop in and disrupt the normal functioning of the business. Money laundering, being one significant issue these days, has given a tough time to the business sector, especially the financial institutions. 

Banks, credit unions, payment companies etc have forever been struggling to maintain a strong, effective security system that could prevent fraud and potential risks. Unfortunately, they have constantly suffered from the loss for quiet years. As per the report generated by the United Nations Office on Drug and Crime, nearly 2-5% of the global GDP or around $800 billion – $2 trillion has been lost to money laundering. Since money laundering is a very clandestine activity, it is relatively difficult to calculate the exact amount laundered. The regulatory authorities have devised a way to fight the frauds by mandating every single business to implement Anti Money Laundering (AML) solutions in their security networks. 

Money Laundering and FATF regulations: 

The problem of money laundering is not new, it has been there since forever. The regulatory authorities have formulated rules that need to be observed by all businesses in order to combat fraud. Similarly, the Financial Action Task Force (FATF), found in 1989, has mandated the financial organisations to strictly comply with the AML risk procedures and fight illegal activities. Along with the technological advancements, the criminals have also polished their ways of scamming by adopting shrewd and sophisticated procedures that raise no suspicion.  Hence, in order to build strong protection bars against the crimes, the AML procedures have also been subjected to various advancements. 

What is Anti Money Laundering?

Anti Money Laundering compliance programs majorly assist a firm in undergoing adequate, intensive procedures of identifying illegal and suspicious activities and deter the criminal’s fraudulent attempts. These set of laws and procedures prevent the criminals from engaging in financial crimes such as money laundering, terrorist financing and other crimes. With the presence of appropriate AML systems, the criminals fail to conceal the source of their funds and no longer succeed in legitimising their illicitly obtained income. Both global and local regulatory bodies, deeply analyse the ongoing money laundering in their respective regions and strictly order the businesses to be following AML compliance. The AML security helps the companies meet the regulatory requirements by screening the customers, monitoring the transactions through an ongoing process and almost instantly detecting any suspicious activity. 

Customer’s Monitoring through AML: 

The customer onboarding process is extremely essential for a company and most of the criminal activities take place from here only. Hence, in order to protect the business from potential financial risks, it is mandated to be AML compliant. The AML verification is one of the procedures of an AML solution where the customers go through a risk assessment process. Customer screening and monitoring forms the base of the AML policy. The automated customer onboarding process enables them to go through a diligent process of identity verification that authenticates their identity. By doing so, they are compared to sanction lists and PEPs. The AML screening makes sure their customers do not, in any way, belong to sanction lists and PEPs, banned or wanted lists because doing business with such people could potentially harm the company. The main purpose of AML screening is to: 

  • avoid sanction violations
  • prevent regulatory fines
  • make risk assessments

How Businesses have developed strong AML systems: 

Considering the dire need of adequate Anti Money Laundering solutions, companies have come forth with the most effective AML solutions that give the scammers a tough time, disrupting the businesses. The AML suite helps the firms to prevent financial crimes in their channels by screening out suspicious entities in a matter of seconds. The existing as well as potential clientele base is screened and monitored through a diligent process that begins by identifying, then monitoring and authenticating. 

When you are running a business, there are fair chances of frauds and scams that can happens with you. Professional book keeping services Glen Allen can save you from this type of mishaps. If you are doubtful with any money trail or transection, you can simply cross check your book. And It’ll only happens when your books are well managed.

The AI-powered ID verification solution begins the identification process by collecting the user’s personally identifiable information and confirming their identity through real time checks. The process does not just end here but the collected information is compared against the AML watchlist for the purpose of flagging high risk identities. Moreover, the AML solution works for the entire business as well. The business search solution screens the entire organisation, authenticates its identity along with that of the owners and directors.