Getting into dishonesty, money launderers always find new tips and tricks to elude the banks. This swindling in banks is gradually growing, and now there is a need for powerful and reluctant AML solution providers. Perhaps consolidated AML solutions in the banking industry could benefit the existing system and the banks’ processes and finances. One of the best methods adopted by many banks and other financial institutes is applying anti-money laundering compliance methodologies. Penetrating structured anti money laundering solutions in the finance sector will surely result in fewer fraud attempts.
Money laundering is a criminal activity that takes place outside the typical scope of economic and financial statistics. According to recent global statistical research, $800 billion was laundered in one year, which is 5% of the world’s total GDP. The reason for this is improper use of AML monitoring and AML compliance. Today, with a rapidly increasing world population and major advancements in technology, digital banking is being introduced all over the world. Modern, digitalised ways to send and receive money are taking over the traditional banking practices of customers as well as banks.
Have a look at how digital banking can be secured by integrating AML systems and AML verification.
AML Compliance Program for Digital Banking
The integration of new technologies into the world, the widely spread trade of crypto currencies, and huge reforms in online payment methods reward the banking sector with world-class opportunities. Similarly, new and much smarter forms of financial crime have started, and to let this happen, technology is providing technical assistance in manipulating cybersecurity measures. The experts state that the AML solutions market is expected to reach $2385.8 million by 2036. To reform and to remove maximum security constraints in the digital banking sector, banks should give priority to AML compliance for their digital banking services to make sure that they are able to point out and prevent money laundering acts and continue delivering regular compliance.
AML Regulations for Digital Banking
Digital banking services have to face conventional money laundering risks as well as modern ones. The latest technology and methodologies have become the number one source for phishing, or developing malicious doodle applications to execute money laundering schemes. International financial authorities are responding to these threats and the gap in regulatory compliance for digital banking services by introducing legislation with a specific focus on digital banking services.
Applying AML Solutions in Digital Banking
Digital banking has been taking over the traditional banking system aggressively since the last few years. Which is why it is now very compulsory to react to money laundering in this particular sector. Digital banking is always at a high risk of phishing and other unauthorised access. Digital banks and other financial institutes must ensure that they are integrating digital onboarding with consistent AML monitoring. Following FATF recommendations, all digital banks should conduct internal compliance programs.
Customer due diligence (CDD)
In order to perfectly verify customers under the AML verification process in digital banking or the ownership of firms, CDD works efficiently. Whereas under a risky approach, customers’ unjustifiable assets or those observed at a higher risk of money laundering should be considered to be verified under (EDD), enhanced due diligence.
In order to supervise the customers’ activities across digital banking transactions, AML monitoring should be a consistent practice. These processes might include monitoring unrecognized accesses, unusual transactions, or transactions with high-risk countries.
AML Screening and AML security
AML Screening and monitoring for politically exposed people is obligatory if a customer is involved in adverse media, talks openly about his assets, and claims to have never laundered money anywhere.
Some businesses always require licenses issued by financial institutions under some parameters, such as crypto currency. FATF requires training schedules to be implemented in order to ensure compliance on a regular basis. Likewise, compliance officers must have the required expertise and authority to carry out their tasks effectively. The skill set should match the digital banking requirements.
Integrate Smart-Tech AML Solutions
Conventional AML compliance and AML solutions are now equipped with smart technology as a part of anti-money laundering systems. To keep track of each and every customer, automated technology is needed for the AML solution. Anti money laundering software is scalable and promises to react to criminal methodologies and ensure that they continue to deliver a secure digital banking environment.
Keeping laundered money or hiding it somewhere is always noticeable to digital banks as well as to other financial institutes and has been in practice for years. Almost every money launderer stays up to date with advancements in bank security systems and AML solutions and finds new and modern ways to keep black money safe and secure. To prevent these money-laundering acts, digital banks should focus on implementing modern and efficient AML solutions.