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Eliminating $2 Trillion Money Laundering Cost with Automated AML Screening


Money Laundering

With the advent of modern money payments, the amount that is washed away every day is also increasing. The money laundering scale is staggering which is affecting the global GDP badly. UN study shows that global GDP is affected by about two to five percent i.e. about $2 trillion. Modern and electronic payment methods have opened a number of opportunities for a fraudster to fool the automated payment methods through malevolent tricks. Money laundering and terrorist financing activities are peaking as a result of remaining loopholes that are exploited by bad actors. In any organization, the compliance team is active to comply with the latest AML regulations to cater to recently recognized tricks and ways to avoid them. These active measures contribute to avoiding illicit funds’ transfer and bad money flow from the legal financial system.

Now, the question is how can a $2 trillion money laundering problem be solved. Traditional financial institutions and companies tend to hire more staff to examine the accounts of users and monitor their activities. They used to perform manual KYC processes and customer due diligence processes to cater to the issue of money laundering. These are necessary to comply with regulatory requirements regarding KYC and AML. Also, to avoid harsh regulatory penalties, it is crucially important to take in place all the norms that are mandatory in the point of view of local regulatory authorities.

Revamping Traditional Banking with Efficient AML/KYC

Manual AML verification requires huge staff that carries identification of each entity manually and performs AML screening checks. AML verification with this process can be prone to mistakes when it comes to verifying each entity separately against a number of sanction lists and criminal databases. Also, sometimes it gets tricky to track the regimes of local government authorities. For example, the recent regulations issued by AMLD5 and the industries it is targeting. Compliance analysts in an organization should be updated with recent news and regulations industry-wise. This is important to acknowledge every single time that the regimes belong to which industries and why.

All this is hefty to manually and has a higher error rate. Instead, integrate the system with the best KYC solutions, that are automated verification processes. These help in automated verification of each onboarding entities that comply with lates regimes, their needs and fulfill the regulatory requirements of the company. Automated AML/KYC verification process is less prone to errors and efficient verification takes place within seconds.

AML Compliance has never been this much easier!

Financial institutions and the industries that involve money flow within the system need to be aware of the risks associated with their system. Money laundering that is affecting the global economic system adversely should be taken seriously, this is what regulatory authorities are doing. AML compliance has become mandatory by local and global regulatory authorities such as AMLD5 (and AMLD6) regulations. After regular sessions, regulatory scrutiny takes place which examines states and their adherence to compliance. Any state or organization that fails to comply with the requirements, is subjected to harsh penalties which include monetary loss, fines and business abandonment (temporary or permanent depending on the degree of non-compliance).

Automated AML compliance fulfills all the needs of regulatory authorities and streamlines the process for both the organization and customers. The efficient AML verification process includes automated AML screening against sanction lists, a list of Politically Exposed Persons (PEPs) and databases of criminal records. In real-time and identity is identified and verified. The automated AML process has streamlined the verification process that molds accordingly with the regimes and company norms.

Author Bio:

Technical Content writing is my passion. I have broad experience in writing for the technical field. I started my writing at the age of sixteen when I was in college. Now I’m already writing for contribution sites as an independent influencer. I wrote many articles on medium and many of them are published in various publications. I wrote many case studies for businesses and nowadays working on the technology of AML Screening lets them know the real need for digital transformation for their business.


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