Uncontrolled money laundering can undermine the integrity of a country’s financial institutions, negatively affect exchange rates and interest rates due to the high integration of stock markets. Ultimately, this money flows into global financial systems, where it can undermine the economies and currencies of individual countries, posing a serious threat to national and international security. Therefore, all possible methods of combating money laundering should be used at all levels.

AML Process Automatization

Today, money launderers can use fast and simple modern electronic financial mechanisms. However, in a world of technologies and constant development, many banks and other institutions also use AML software to ease the process of verifying a potential client. Using one special program can replace a number of actions that any financial institution should do to prevent fraud.

Actions That AML Software Can Replace

To prevent money laundering, banks and organizations have to apply:

• Identification procedures.

A financial organization should develop and implement complex procedures for opening accounts, credits, and other business relationships, as well as transactions with people who do not have accounts;

– Collect data about the real identity of the client, including the real owner of the account opened under another name;

– Verification of the identity data in order to avoid opening accounts for fictitious users;

– Collect data on the client’s job or professional activity, the sources of their income, fortune, or assets, as well as on the specific source of funds involved in transactions performed through the bank;

– Know the purpose for which the account is opened and represent the types of transactions in which the given client is usually involved. When opening an account, bank employees must understand whether the client needs to be classified as a high-risk category that requires increased attention.

• Monitoring procedures.

– Using internal systems for identifying and monitoring suspicious transactions;

– Assess risk based on specific types of accounts, regions, and transactions;

– Check any transaction that exceeds the established monetary threshold for deposits when opening an account, monthly wire transfers, cash transactions, traveller’s checks, obtaining loans, and concluding transactions, including the purchase and sale of currencies, options, and precious metals, etc.;

– Check the increased activity on bank accounts, especially those that can become objects of questionable transactions (offshore and correspondent accounts, accounts of non-bank financial institutions, politicians and personal investments of company employees, accounts, information about which may be requested by the judicial authorities, etc.).

Simplifying the Procedure

As you can see, the system of fraud prevention includes many steps and complex strategies. It also takes much time and resources to implement all of the needed processes for client verification and confirmation. Unfortunately, no anti-money laundering program can be 100% effective. Criminals use increasingly sophisticated methods to bypass banking programs to identify illegal transactions.

Here’s why using software that can help with collecting data and monitoring accounts will help identify a suspicious potential client at the very beginning. Covery offers all types of AML prevention solutions to help and ease the procedure of client verification.