Owning or being a part of a big business can pose many risks that can harm the company’s reputation and finance. It is highly necessary to educate the staff about AML compliance and how it can affect them and the company to be more knowledgeable about the schemes they can fall into and get involved in such complex loops of trouble.
What is AML compliance?
AML expands to anti-money laundering and companies need to comply with AML laws to make sure they are well protected from criminal activities taking place within their businesses. This compliance allows the company to track all their transactions and money exchanges which can then give them a list of balanced sheets that can suspect money laundering activities if any. This system can help one understand criminal activities through a series of transactions that may cause misgivings and hence be carried further. There are many ways in which criminals carry out money laundering like:
- Fake businesses: Most criminals run a fake business that is supposedly earning revenues through their work. This activity legitimizes their transactions and lessens doubts about money laundering. Some systems can trace if an illegitimate business is running such illegal acts but it is extremely tough to find these out since many of them use highly engineered software that can allow them to practise such exchanges easily.
- Dual personas: It is the most used way to launder money where criminals use fake online personas that can easily trick people into trusting them. This practice is also performed in real life with elaborate practises where a person changes their whole identity for money exchanges or transfers so it does not get traced back to them.
- Foreign and virtual transactions: This process is easily carried out with the least possibility of being traced back since it does not require an identity. Anyone could invest if they just own a bank account and have access to cryptocurrency which makes it very easy for great transactions to be exchanged here with no suspicion.
These were some ways of how money laundering can take place in real life on the regular. It is best to avoid such practices by issuing AML compliance necessities in the workplace. Since whitewashing money is also easier through online platforms, computer systems need software that can detect such activities. This system is generally paired with KYC (know your customer) systems where one can confirm their identities before purchase which helps in associating money with an individual and keeping track of what goes where.
AML software allows monitoring right from customer onboarding so a whole sheet is maintained about their activities from the beginning. It has many other features like customer monitoring, payment screening, watching transactions, and more with the assurance, all the information is safeguarded throughout the process. If the receiver of the money is present in various forms and lists where they may be blacklisted or create suspicion, this software can figure it out and let everyone know. One of the features that AML systems provide is that of monitoring that the money is being exchanged after five days only since most criminal activities require immediate transactions. Immediate transactions can be a sign of illegal exchanges.
Money laundering can never be erased on the whole. It takes up around 2-5 per cent of the world’s GDP. This software only allows to lessen its growth rate or to find out the maximum number of cases that can affect people.