With over $2 trillion amount of illicit funds transferred every year, money laundering is dramatically becoming one of the major crimes. Despite the presence of Anti-Money Laundering (AML) regulations, criminals somehow manage to bypass the authenticity checks. This helps them make their ill-gotten funds look legitimate. Technological shifts are also assisting criminals in dodging the authorities by using difficult-to-identify methods.
Therefore, digital challenges require robust online AML solutions. Where criminals use methods like targeting less regulated industries, hidden UBOs, and camouflage identities, digital AML screening solutions identify them in real-time. The AI-powered tools help financial institutions access global records that further prevent chances of money laundering by overseas criminals. Read on for more details regarding how they protect industries.
AML Screening Solutions – Securing Industries in Numerous Ways
Along with protecting industries from hefty non-compliance fines, AML compliance solutions also provide cybersecurity. It further prevents financial breaches, money laundering, and terrorism funding. As per regulatory standards like Bank Secrecy Act (BSA), 40 Recommendations by FATF, 6AMLD, and others, financial institutions are obliged to build effective AML compliance programs.
Furthermore, these regulations apply to financial institutions such as banks, industries, and other online as well as offline sectors. With efficient AML screening mechanisms in place, financial institutions and industries can overcome the following threats:
- Foreign and internal terrorism funding
- Funds transferred during drug trafficking and other organized crimes
- Virtual criminal operations
- Identity fraud
- Money laundering during human trafficking
- Cybercrimes
- Data breaches
- Money laundering through crypto-trading
Regulatory bodies are in action to enforce more strict regulations and checks on industries involving money transfers. As per Shufti Pro News, this is because criminals are coming up with advanced methods to launder money. They either use fake information and identities, keep their UBOs confidential, or hide their source of funds that help them escape the anti-money laundering checks.
Therefore, financial institutions, as well as industries, need to employ AI-driven AML verification solutions. They not only validate customers but also track their activities to prevent unforeseen threats of financial crimes. With technologically advanced methods, industries can perform due diligence and predict the risks customers possess.
AI-Driven AML Systems – Bringing Efficacy to Compliance Programs
AI-powered AML solutions help industries counter the backlash they face due to the dramatic rise in money laundering cases. They provide authentic identity verification, enhanced due diligence, risk assessment, watchlist screening, and ongoing monitoring of activities.
This way, institutions can ensure that they are onboarding legit customers while staying in line with the global anti-money laundering regulations. A detailed overview of these benefits is in the next section.
Authentic Identity Validation
The AI-driven AML monitoring solutions are helping institutions incorporate authentic identity checks. They provide real-time identification while validating details against global watchlists. Shufti Pro Funding indicates that the online identity verification solutions provide several checks like document validation, cross-matching, and biometric identification.
Online AML solutions are capable of analyzing huge data sets that further eliminate chances of discrepancies. Ultimately, financial institutions can draw a line between legit customers and criminals prior to their onboarding.
Risk-Based Approach
The automated AML verification solutions are capable of self-learning which makes them superior to manual methods. They help institutions as well as industries to readily assess the risks customers possess. With its robust tools, the AI-powered AML compliance solutions identify if the users were involved in financial crimes in the past.
Moreover, it also cross-match the identity against global databases to further prevent the risk of money laundering or other related risks. Hence, institutions can mitigate the chances of non-compliance penalties while assisting legit customers.
Screening Against Global Watchlists
The technologically advanced AML solutions are capable of accessing global watchlists that aid in customers’ risk assessments. Also, industries can identify companies that fall on the sanction lists. Moreover, it also helps financial institutions to verify high-profile risk-involved customers by cross-matching them against Politically Exposed Persons (PEPs) lists.
AI-powered AML security checks help institutions, industries, and every other money-involved platform to authentically draw a line between criminals and legit users. With this, they can not only mitigate the chances of money laundering but also ensure AML compliance.
Ongoing Tracking of Transaction
Transaction monitoring is another obligation put forth by the regulatory bodies. Criminals often use different methods to bypass the AML checks during digital onboarding. However, they carry out their malicious intentions afterward. Despite the set transaction limit, criminals either make multiple transactions or withdraw hefty amounts. This way they exceed the threshold and launder money.
With an efficient AML compliance program in place, institutions can monitor transactions on the go. If any customer exceeds the threshold, the system will identify them in time. Furthermore, it reduces the chances of false positives.
Final Word
Financial institutions are in line to provide convenience, security, and authenticity to their customers. However, in this digitally evolving era, cybercriminals and bad actors are complicating these initiatives. Therefore, financial institutions and other industries need to employ effective AML solutions that not only identify criminals prior to onboarding but also track them on the go.
