AML Compliance Program: Essentials to Prevent Financial Crime

Money laundering is a rising issue among countries that are dealing with a massive flow of dirty money in their financial institutes. Various criminal activities like human trafficking, bribery, and corruption are directly linked with money laundering. These activities pose a huge risk to the banks. 

They use sophisticated methods to keep their assets well-hidden from the authorities. It often becomes complicated to capture the criminals through manual oversight. For such reasons, the regulatory bodies require various organizations to implement AML compliance.

Contrary to the manual work, AI-enabled anti-money laundering solutions can help industries keep-up with AML KYC compliance. Practically, it means that organizations can easily navigate the risks and significantly reduce the burden on human resources. For this reason, complying with anti-money laundering compliance would become easier and cost-effective. 

Implementation of best anti-money laundering policies would ensure that companies feel confident in their operations. Moreover, it also helps to protect organizations from any money laundering threats. So, the question arises how organizations can measure the success with anti-money laundering compliance? The most simple answer is that organizations can easily avoid fines or penalties with non-compliance. 

What Businesses Require Implementation of AML Compliance? 

With evolving technology, the world has seen advancements in several industries. Where it generated opportunities for consumers, it also allowed fraudsters to make their roots grow stronger. Nowadays money launderers are using different platforms like banks, money transfer companies, e-wallets, online gambling, credit, and insurance companies. Some businesses have implemented AML and KYC compliance to prevent criminal activities. For this reason, companies should take appropriate measures to meet compliance needs. 

Few industries such as cryptocurrency and online gaming platforms are not highly regulated which puts organizations and their customers at risk. Although, companies that are regulated and fail to comply with the AML compliance programs risk getting huge fines. According to Security Brief, Asia Pacific was fined a huge sum of $5.1 Billion for non-compliance with AML compliance. Such heavy fines should be a strong reminder for organizations that either take compliance lightly. Therefore, it requires companies to pay extra attention to compliance needs. 

Despite AML compliance being different for each country, they all serve the same purpose to prevent any financial crime. For this reason, organizations in their respective countries are obligated to comply with FATF recommendations and EU regulations. 

Implementing a Risk-Based Model of Anti-Money Laundering Compliance Program 

At the most primary level, the AML compliance program is serving as a risk-based model. Firstly, companies should identify different risk factors involved during the customer onboarding process. Moreover, the existing customer base is also required to be checked daily after a few intervals - because anti-money laundering risks would continue to change and evolve over the period. Therefore, companies are required to deploy an effective AML compliance program by developing a control program. However, the program will be tailored to the risks posed by different customers. 

Although, the implementation of an effective AML strategy is possible through an anti-money laundering solution. 

Role of AML Compliance Officer in Implementing AML Compliance Program 

AML and compliance require careful attention to detail during a customer onboarding process. It is the compliance officer’s job to see if the AML compliance program is working effectively. For various companies, the role of an AML compliance officer is quite important - therefore, the position requires certain qualifications to be considered fit for this role. 

The primary task of an AML compliance officer is to recognize any risks or suspicious transactions by implementing a risk-based model. Further, according to the FATF and EU regulations, organizations must keep their compliance officer updated through various training. 

AML Compliance During Customer Onboarding Process 

According to a risk-based model, companies are obligated to determine different anti-money laundering risks during a customer onboarding process. It often applies during a customer account opening process that requires a thorough inspection of AML and KYC regulations. During AML (Anti-money Laundering) and KYC (Know Your Customer) methods, a customer's identity is verified by scanning them through different sanction lists like the PEP list. 

Further, with an ongoing AML screening process conducted through the AI-enabled anti-money laundering solution - businesses can authenticate customers against a maintained database. 

AML compliance program is obligatory for various enterprises that deal with large amounts of money almost daily. To ensure that countries comply with AML and KYC compliance, organizations should integrate anti-money laundering solutions. It would help companies to avoid risks and challenges with money laundering and terror financing.