Anti-Money Laundering in Banking and Finance

The technological advancements led to a 360-degree change in the world. Banks and financial institutions have also evolved through it. Obviously, there are unparalleled examples of their benefits over their complications. But, the threats of fraud and cybercrimes like money laundering can never be neglected.


On average, most banks deal in millions of transactions, and it's very easy for fraudsters to dig loopholes into the system. That is when there arises a need for AML monitoring. Today, all banks, financial institutions, and even large-scale businesses have incorporated anti-money laundering transaction monitoring into their work.



They have devised measures to minimize the threats and develop a precocious system against money launderers. It is generally done through KYCs, customer screening, and transactions, customer due diligence, suspicious activity reporting, etc. 



Know Your Customer (KYC)


Know Your Customer (KYC) is an advanced approach that helps identify and verify a customer's identity. Most banks and financial institutions ask for it prior to opening a bank account. It is mandatory for banks to ask for a KYC as it is the first critical step for an AML program.



The KYC procedure goes like this- 


  • First of all, banks collect the proof of customer identification and check its accuracy. 

  • Banks ensure that the digital identity of the customer matches their real-world identity. Both these parameters must prove who they say they are.


This process is accomplished using ID document verification, face verification, and proof of address on bills or bank statements. An identity verification solution can help you meet your KYC obligations. It promises to deliver protection for your business and, at the same time, convenience to your customers.


If there arises any suspicion at the time of ongoing monitoring of KYC, legal actions can be taken against the individual. In fact, it prepares banks to be more aware and efficient in keeping a check and balance between their clients. 



The Bottom Line


The risks associated with money laundering will forever continue to be an issue in the cyberworld. But, banks and financial institutions should be proactive in seeking aml monitoring to minimize the threats it can do.

Comments

Post a Comment

Popular posts from this blog

Importance of AML Screening Software For Businesses | SMART Infotech

Image
Politically Exposed Persons have to be identified & screened in companies as they pose many financial fraud risks. AML-TRACE performs PEP Screening , which helps you keep all such dangers at bay. PEPs are high-risk clients who have access to more potent opportunities than ordinary citizens to acquire assets via illegal means like money laundering & taking bribes. For the most effective AML compliance to become possible, it is crucial to identify PEPs & determine their risks. This is generally referred to as PEP list screening. Use of standardized data for AML name screening by AML-TRACE Complete & reliable electronic customer data records are the basis for effective PEP screening. Without accurate unique identification data, PEP screening will not serve its purpose. The eventual results arrived at based on this data will be irrelevant & inconsistent. Here, we lay out the minimum information that all companies need to keep a record of so that an effective PEP screeni
Read more

How to Save a Business From Financial Fraud?

Image
If nothing else, the present crisis has revealed that you can never be ‘too prepared’ for the worst. But what if we tell you that we have a solution that exceeds your expectations when it comes to minimizing your business’ financial risks? AML-TRACE is this solution. Featuring cutting-edge AI, it is an on-site and cloud-based anti-money laundering (AML) software that helps prevent financial crimes and counter-terrorism financing activities against businesses. These include exchange houses, insurance companies, DNFBPs like dealers in precious metals and stones, brokerage firms, real estate, legal firms, audit firms and other industries. Simply put, AML-TRACE help firms identify the potential risks of the entities or parties, with whom businesses conduct (or are planning to conduct) transactions. Benefits of using AML-TRACE:- It helps collect, maintain & analyze the KYC data.  It improves the management process of client onboarding. The software automates workflows within the organi
Read more

Sanctions Screening Software: A Vital Tool for Compliance in the UAE

Image
Sanctions screening software UAE is a tool that ensures businesses are avoiding illegal activities. Companies need to use sanctions screening software to prevent financial and legal consequences. In other words, this software is vital for compliance in the UAE. It helps businesses to operate within the law and maintain a good reputation. Many companies are turning to sanctions screening software to ensure compliance with these regulations. Why is Sanctions Screening Software Important in the UAE? Sanctions screening software is essential in the United Arab Emirates (UAE) because the country has strict laws. UAE has regulations on financial transactions and business dealings with individuals and entities. By using sanctions screening software, businesses in the UAE can ensure that they comply with these regulations. For example, suppose a business in the UAE would conduct a transaction with an individual or entity under sanctions. In that case, it could result in penalties, fines, or e
Read more