Anti-Money Laundering : Everything You Need To Know

With the advancement of technology and a rise in the demand for and use of cryptocurrencies, there has been a significant rise in sophisticated financial crimes like money laundering.

What is Anti-Money Laundering?

According to James Chen, Investopedia, “Money laundering is the illegal process of making large amounts of money generated by a criminal activity, such as terrorist funding; appear to have come from a legitimate source.”

Then how do financial organizations prevent such an illegal activity? This is where anti-money laundering (AML) comes in.

As the name suggests, AML refers to a group of procedures and regulations set up to prevent the act of money laundering. Anti-money laundering (AML) refers to the laws, regulations and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.

Anti-money laundering (AML) refers to the laws, regulations and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.

Governments across the globe are constantly devising stringent anti-money-laundering policies and procedures to ensure that financial organizations and institutions are well equipped to identify and report any fraudulent activity.

Why is Anti-Money Laundering Important?

According to reports, the total amount of money laundered across the globe in a year is 2 to 5 percent of global GDP, which roughly amounts to USD 800 billion to USD 2 trillion, but mind you, this is a very low estimate.

The total amount of money laundered across the globe in a year roughly amounts to USD 800 billion to USD 2 trillion.

Anti-money laundering is key to prevention of money laundering associated with organized crime and unorganized crime. This process is also associated with counter-financing of terrorism (CFT) that banks and other financial institutions utilize to prevent terrorism.

 How Does Anti-Money Laundering Work?

Anti-money-laundering procedures differ from state to state, country to country. Nevertheless, most of the financial organizations carry out the following AML procedures to ensure compliance :

  • Know Your Customer (KYC)
  • Huge currency transaction reports
  • Monitoring suspicious activities
  • Sanctions compliance

 

What are the newest technologies used in financial compliance?

Abhishek Gupta, Managing Director of Effiya Technologies says : 

“There are almost all the machine learning objectives that you can talk about, which are applicable for structured and unstructured data. They are available for financial compliance as well.

So if I talk about neural network, recurring neural network they are all very relevant in transaction monitoring. Application of text mining or natural language processing, again has a huge role in compliance.  So it depends on the application area, but compliance industry is almost as sophisticated in terms of application of machine learning, as other industries are. Effiya is using majority of these technologies.”

 

Types of Software Addressing AML Business Requirements

The four main types of Anti-Money Laundering Software for banks and other institutions as follows :

  • AML screening software help in identifying suspicious designs of transactions through suspicious activity reports or suspicious transaction reports
  • Currency transaction reporting systems focus on large cash transaction reporting needs
  • Customer identity management systems cross-check customer details with an international database
  • AML compliance software uses AML analytics that allow organizations to comply with AML regulatory needs

 

Key Features of AML Software

Some of the key features of Anti-Money Laundering software solutions or money laundering investigation software that are based on data analytics are as follows :

  • Monitoring suspicious activity
  • Prioritizing intelligent alerts
  • Enhancing alerts
  • Automating SAR filings
  • Providing a 360-degree entity view
  • Analytics and profiling
  • High predictive power

Automated solutions and AML check software imaginatively deployed can go a long way in addressing financial crime prevention. Mitigate risks and effectively manage anti-money laundering compliance and regulations using AML software for banks and financial institutions, fin-techs and financial start-ups, exchange houses and asset management firms.

 

Effiya Anti-Money Laundering Software Solution

Anti-Money Laundering Software
Effiya Anti-money Laundering Solution reduces false positive alerts by 25%

Effiya Anti-money Laundering Solution reduces false positive alerts by 25%. This automates manual work and saves time of the investigator, leading to significant savings of upto 25% of your AML compliance costs.

The solution has proprietary ‘Machine Learning based Predictive Engine to manage alerts, based on historical trends and customer profiles. The Investigation becomes more accurate with AI-enabled high predictive power.

For FREE Product Demo – visit https://www.effiya.com/aml-solution/

Effiya AML Solution is ranked highly in terms of AML rules being easily configurable by business users themselves, without coding or IT dependencies. The solution has extremely user-friendly interface with visual investigation platform.

 

References :

https://blog.equinix.com/blog/2021/01/07/the-rise-of-virtual-events-and-the-technologies-that-power-them/#_edn1

https://www.sas.com/en_in/insights/fraud/anti-money-laundering.html

https://en.wikipedia.org/wiki/Anti-money_laundering_software

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