Money laundering is a big problem. The globalization of the financial system and the development of digital banking has made detecting and preventing money laundering very sophisticated. However, there is still need for more effort. There are many risks that are associated with money laundering. To begin with, corrupt state officials in various countries can use loopholes in banking to launder corrupt money and in worst cases; criminal organizations can use the banking system to fund criminal activities through money laundering. The good thing is that there are systems in place today that can be used to detect and prevent such cases.
What Are Anti Money Laundering Systems?
There are four major aml solutions or systems that are used in modern banking to detect and prevent money laundering. Here they are:
Transaction Monitoring Systems
The main job for the transaction monitoring systems is to track each transaction made in a bank and ensure its above board. The bank will set a behavioral pattern for each client and if there is a transaction that is not aligned to that particular profile, then more investigation is needed. The transaction monitoring system is automated and therefore it plays a central role in keeping banks safe from would be money launders.
Currency Transaction Reporting Systems
The currency transaction system is created to monitor large transactions of money. If the transaction exceeds a certain threshold, then it will be flagged. In the US for example, $10, 000 is the maximum amount of money that can be transacted without being flagged. Any transaction above this amount has to be investigated by the bank and approved before it goes through.
Customer Identity Management System
Banks also need to know who they were working with. The customer identity management systems is designed to verify the identity of customers and cross check his or her name with existing criminal databases to ensure they are not compromised.
Compliance Monitoring And Surveillance Software
The compliance monitoring and surveillance software is an oversight solution that monitors every transaction to ensure regulatory compliance. This is a very common strategy in the banking industry and high quality systems can easily detect any financial activity for action to be taken. The most important thing for banks is to get high quality solutions and leading providers like Trapets compliance monitoring and surveillance can help with this.
Exposure to financial crimes is one of the major things banks always try to limit. Money laundering is one of these crimes and the investment that has gone in aml solutions shows exactly how important the issue is. You can learn more about anti money laundering monitoring and surveillance in the banking sector anytime at Trapets.