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.

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