The KYC/AML services ensure that banks and other financial companies verify the identities of individuals or UBOs of a firm. It damages the country’s image when a case of money laundering appears on a list of global sanctions. Pandora papers disclose many cases of money laundering in many countries nationwide.
As money laundering cases emerged in many countries, Anti Money Laundering (AML) was enforced in the financial sector to fight these illegal activities. In money laundering, many higher authorities at the government level or Politically exposed people are involved in this crime. It is also known as white-collar crime. Statistics show that presidents of some countries are often involved in this grave crime.
The Perils Of Money Laundering
Anti-money laundering process involves distributing and cleaning the black money by adding it to the country’s economy. Some people might wonder, why people are involved in money laundering activities in the first place? This money is called black money because it is earned through illegal sources like human trafficking, corruption, and many other factors that bring the consequences. As Shufti Pro news says, Money laundering destroys the country’s economy because the money is mainly used in terrorism financing etc. That’s why FATF and IMF are working to eradicate it.
People who are involved in money laundering don’t get caught because they are higher authorities and have much more power than a common citizen. Those who are involved in this illegal activity find loopholes in the economy and use that for their purposes. The proper AML system identifies any suspects and suspicious leads of a person. It provides safety and security to eliminate the money laundering issues by increasing cyber security.
AML Security To Prevent Money Laundering
Financial sectors are implementing AML verification to prevent any illegal activity. Every sector needs to follow AML compliance to prevent illegal transactions and stabilize the economy. According to research and shufti pro funding, the institutions have to follow regulations before providing services to the clients, they need to confirm their identity and income sources, and screen them against AML global lists. Nowadays, different institutions run a risk check on their customers and then maintain a portfolio of each customer that will help in future evaluations.
Introducing New Ways of AML Screening
Artificial intelligence is a need in today’s world. Every sector is integrating its system with AI-based technology to enhance the safety and security of the system. AML interface is user-friendly that requires a certain amount of information about an individual. Here are some steps listed below that will enhance the AI security:
- The customer provides his original identification documents with complete records of information
- The institution verifies the identity with the help of facial recognition scans that scan the customer’s face, and portray his features can be verified by the system.
- The scanned features will then be compared with official documents that the government provides.
- After the identity of the customer is verified, the process of document verification starts. The information is extracted through OCR and then compared with the previous documents provided.
- The customer’s information is being checked against the AML list, watchlists, and politically exposed people. If someone’s name is found on the list, their arrival can be restricted and their name is immediately reported to the authorities that will take legal action against them. A customer can only be provided with access once their profile shows that they are risk-free and their name is not on the list.
The Monitoring System of AML System
After AML monitoring, several identity verifications based on KYC or KYB criteria, each account is rated a risk factor. AML solution keeps records of the transactions of the customers. The profiles of customers are created based on risk factors. Several factors take part in the risk factor other than any evidence, or a person’s country has an increased ratio of fraud and illegal activities. If someone’s name is mentioned in the PEP list, he or she would more likely to be involved in cases like money laundering. The profile will immediately be labeled in the prior authentication.
Final Thoughts
Anti Money Laundering (AML) is a process that needs to be implemented in every sector to prevent illegal activities. AML system is AI-based and it works in an efficient, and adaptable manner. AML solution helps combat issues like money laundering activities and other factors that are associated with it.
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