AML Verification: The Corporate Game Changer in 2021

Anti-money laundering checks are a significant safety protocol for monetary institutions, particularly for the banking sector. Each monetary institution is obliged to conduct AML verification before onboarding clients to fight scams and potential anti-money laundering activities. The nations that come under the suite of Financial Action Task Force particularly are liable to follow the AML laws set forth. The financial action task force, therefore, makes sure global action to combat the increasing burden of money laundering and financing terrorism. 

Know your customer and anti-money laundering procedures were set into action by regulatory authorities to deliberately lay down particular measures. That should be adopted to authenticate users in monetary institutions to reduce financing terrorism within the industry. Malicious activities amount to an estimated 1.4 % of the European Union’s total GDP. Consequently, anti-money laundering compliance mandates each monetary sector to comply with the requirements to withdraw fines in case of deceiving the system whether consciously or unconsciously. 

How AML Verification and IDV are associated?

FATF – an intergovernmental body, was established in 1989, for the main reason to limit money laundering and malicious activities. A financial action task force has 37 nations on its panel and one of the requirements for monetary institutions directing in financial action task force member states is to follow with know your customer by authenticating the identities of their possible clients. 

Anti-money laundering verification assists them to reveal and examine high-risk people involved in financial crimes such as bribery, tax evasion, malicious activities. Negligence to report such crimes to the regulative authorities can result in increased fines and penalties. The total fines due to non-compliance with AML laws from June 2018 to April 2019 was £245,233,671, in the United Kingdom, alone. 

EDD, also known as KYC, usually assists in achieving anti-money laundering compliance. Since a sophisticated know, your customer and anti-money laundering verification system reduce fraudulent activities such as money laundering and financing terrorism from being included with legitimate entities. IDV assists verify every client against government-authorized identity documents and supporting pieces of proof such as facial recognition, age verification, and consent verification. Comprehensive know your customer along with anti-money laundering integration minimizes the uncertainties of unusual activities in the financial ecosystem. Also, to comply with the guidelines of global and local regulatory authorities, know your customer procedure is compulsory for the banking sector. AML verification is a part of know your customer, which verifies users during the onboarding procedure against government-approved sanctions and watchlists, involving politically exposed people lists and global watchlists. 

Monetary institutions usually conduct two types of anti-money laundering screening:


Onboarding: Here, clients are verified in the early levels of user onboarding. As stated above, they are verified against global watchlists, politically exposed people lists, and sanction lists. Databases should come under the guidelines of the financial action task force and general data protection regulation. If users are successfully authenticated and do not belong to any global watchlists, they move to the subsequent stage, or else the procedure will be rejected altogether. 

Continuous: this sort of AML identity verification occurs regularly. Here customers are examined regularly, say for instance, when the client updates his data regarding a bank account or when there are alterations or modifications in the global watchlists. 

No company is ever free of scams but the monetary sector is more exposed to money mules and fraudsters. As technological advancement is becoming more resilient, fraudsters are easily innovative methods of stealing cash. Data breaches have increased to 47.67% in the previous few years, one measure ahead to shield their clients and expenses. That’s why by adopting an anti-money laundering system, businesses can prevent fraudulent activities before they even occur. 

These anti-money laundering checks can be performed in real-time. The precision of this solution is a lot more than the standard procedure. The expense of hiring and onboarding the employees is protected along with the heavy amount of fines the companies have to face. The companies no longer have to be at the stake of getting prohibited by the global regulatory authorities and deteriorating the company’s brand repute.

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