A market free from fraudsters is something no business will ever witness but still, entities have to do their part by following regulatory obligations and protocols for a bright future. AML solutions shape the customer identification and transaction monitoring of all clients seamlessly and deliver authentic results on time. The demand curve of digital screening solutions is inclining upwards at a brisk pace. According to research, it is expected that the market size of AML solutions would reach almost 1.77 billion U.S dollars in 2023.
This shows an increase of 24% from 2017 but the figures of financial crimes are increasing way more than that. Without AI-driven systems and a focused compliance team by financial institutes, things would get worse one can think of. The amount laundered would cross the numbers of “Avengers” by a great difference.
Importance of AML Verification
The regulatory obligations have changed a lot in the last few years since financial offenses are crossing all previous records. The AML solutions are inevitable to ensure protocols with institutions like FATF. The standards policies and a risk-based approach for every client profile by the robust working mechanism of AML systems minimize the danger zone for an entity.
Performance of the Compliance Team
Since the 6th AML directive, the businesses are required to have an expert group of employees in a compliance team for monitoring transactional activities of clients. The AML solutions with global coverage of clients make the KYC verification completely effortless and subsequently, the compliance team manages their tasks smoothly due to it. The enormous penalties by the regulatory authorities due to negligence of the compliance team are never a possibility by the AML solutions.
The AML solutions maintain extensive and tamper-proof records of every client during the initial customer identification and throughout on a repeated basis.
Since the level of authentication has been raised in the financial sector. Scammers have increased their radius. Nowadays, other than banks, fraudsters victimise auditors, real-estate agencies, businesses trading in valuable metals like gold, silver, diamond, and others. The AML solutions confirm every profile against sanctions and watchlists. For better compliance, the enterprise should not cross-check the client against only domestic databases but on a global level as well.
Reporting On Time
The AML solutions monitor all clients in accordance with regulatory policies and regulations. The compliance program clearly states reporting the suspicious transaction to the concerned authority the moment it gets released by the organisation. The process consists of two steps or reports: CRT and SAR.
The AML solutions recognize transactions surpassing the normal threshold range. On that, the system alerts the firm and compliance team can create a CRT, referred to as the Currency Transaction Report. Even if the suspicious is there on the particular profile, a SAR (Suspicious Activity Report). Entire data of the particular transaction along with both parties is presented to the authority for preserving the firm from the action. This goes effortlessly by the AML solutions.
AmBank Scandal
An inefficient compliance team or AML solutions can always lead to a loss of reputation in the market. A monetary penalty can be absorbed by several measures but once a customer loses faith in the firm there’s no way to regain it. The AML solutions provide business authentic customers so an impersonator or fraud cannot destroy healthy client relationships. It was reported in 2021 that AmBank was penalized. The former premier of Malaysia Mr. Najib Raza was alleged for laundering money. The government held the Ambank and they decided to settle the matter by paying 700 million U.S dollars.
For EDD
This also raises the most common and crucial concern. The AML solutions seamlessly categorize high-risk customers in a business in real-time. The high-risk transactions also call for EDD (Enhanced Due Diligence). The system confirms entities or individuals involved in the funds transfer.
In the case of a corporation, the stakeholders, directors, and proprietors are authenticated in the AML screening. Other than that, the AML solutions can seamlessly identify if a client belongs from a high-risk country and poses to be a resident of somewhere else.
Wrapping Up
The AML solutions are ineluctable for a safe and reliable marketplace. The compliance standards would keep on changing so will be the tactics of fraudsters and criminals. In all of this, the perspective of customers about a particular entity in their favor of them should remain the same. The AML solutions help businesses to make that happen. Automated technologies ensure a better future, the integration of AML screening in the KYC verification creates a strong defense.
