Anti-money laundering (AML) system can be referred to as a set of legal laws, policies, and regulations to identify, track, review and report malicious banking transactions.
AML primarily helps to alleviate money laundering and terrorist activities. AML software ensures the that regulatory compliances are followed, and makes managing customer data, & reporting suspicious and fraudulent activities possible if required.
Money laundering originates from unlawful and illegitimate activities such as drug and commodity trafficking, slave exchange, gambling rinks and others. The AML jurisdictions started from 1989 and were implemented roughly in the 20th century due to the terrorist attacks in the USA. The Financial Action Task Force (FATF) was introduced to mitigate money laundering activities and ensure compliance.
Virtual currency has been under close observation in recent years, leveraging users to maintain privacy while making digital transactions. With the passing years, financial frauds and risks have altered criminal techniques and tactics which is creating a surge in the fraudulent activities. Hence it is becoming crucial to embrace AML software to track fraud, curb illegal & malicious transactions.
AML is complex and inculcates large data sets from multiple sources with intricate operations & regulations while handling risks hand-in-hand. Sophistication in technology is causing rampant friction amongst financials services, banks & fraudsters. Banks and enterprises are combating to comply with FinCen, 6AMLD, and more regulations, influencing the conventional systems to meet timelines and enhance the operational efficacy. Both AML & KYC/CDD processes are intricate, however, Intelligent Automation, backed with AI and ML, optimizes the false positive rate, manual errors and leverages human intelligence through bots effectively.
We are already aware Anti-Money Laundering as a process that involves large data-ingestion, which makes it challenging to manage the whole risk process. The convergence of technology innovation & advancements has changed customer interactions and altered the bank landscape.
In the recent pandemic hit, people working from home has led to rise in fraud activities due to significant switch in customer behavior across the world with digital & online shopping. The perpetual cyber-fraud & risk events could be alleviated with robust anti-money laundering solutions.
The money laundering and terrorist activities are the toughest conundrum to banks and organizations. It is imperative that financial services upgrade or level up their existing AML systems with the right one. The robust AML solutions can safeguard reputational damages, maximize overall efficiency, and can futureproof systems and processes.