Money Laundering Tools to Combat Financial Crimes

The obliged entities are enforced to comply with the local regulatory authorities and their requirements. The anti-money laundering compliance program is supposed to be adopted by the industries that could be prone to it and It is not that hard to figure out. Any industry that evolves money, asset or any sort of currency flow could become prey to money launderers and terrorist financing.

Fraudsters are always in search of golden opportunities that are provided online in the form of e-commerce stores or black Friday sales. Also, financial institutions, virtual currency and service providers, legal sectors, online gaming, all lie in the category of attraction points for money launderers.

After recognizing these platforms, there is a need for adopting stringent steps that contribute to combatting the risks of bad money flow across the globe.

Panama paper leaks have spotlighted money launderers, in which many known personalities were identified that transferred ill-gotten gains across the globe to convert it into good money.

Such incidences have wakened the beneficial owners if their industry got caught aiding any criminal activity. Now the question arises that how the owner should know about a particular customer if he is involved in money laundering. 

Know Your Customer

Know Your Customer (KYC) is a customer identity verification process. Being a service provider, you should know that who is your customer. For this, only knowing name, address and contact number are not enough. First of all, including personal information, sensitive information should also b taken. Secondly, all the information should be verified with supporting documents or biometrics.

Also through face verification, fingerprint scanning, id card or passport verification, identity can be verified. KYC is mandatory for the physical and well as online service providers to make sure that their company is not involved in facilitating any criminal activity. Your legitimate business can be under threat of regulatory authorities and their severe fines. 

AML Screening

Anti-money laundering (AML) screening is crucially important for any online business, financial institution, legal sector, gaming industry, etc.

AML screening serves the purpose of customer verification against sanction lists. These lists include all criminal records, databases of exposed persons issued by some law enforcement agencies and regulatory authorities. Screening against these lists filters out bad customers from good ones whoever comes under the premises of your business. 

AML screening is necessary to perform for two main reasons, to avoid your business from heavy business loss and to comply with the local regulators. Also, the discrepancy in any of the situations can harm your business ultimately leading to reputational damage. AML screening software is available that takes in place automated customer verification.

All the business need to do is, integrate KYC/AML screening API with the system and perform automatic verification. Now, instead of manual verification through traditional ways, businesses can verify onboarding identities through AML screening software. 

AML Norms and Standards

To combat financial crimes that are either done through identity theft, data breaches, credentials theft or cyberattacks, AML screening is a must to do. Fraudsters steal the data from online customers. And using that identity, perform a malevolent transaction to transfer the embezzle funds anywhere around the globe. 

There are AML compliance standards and norms that need to be followed based on the regulators declared by local regulators. Targeted industries and anti-money laundering directives should be considered the way they are supposed to be.

Otherwise, regulatory fines would be charged that now include harsher punishments of imprisonment. Compliance framework should be followed with the conscious strategies. In a nutshell, AML screening is a mandatory step to avoid ruinous circumstances that can adversely affect your business.