Have you ever wondered how foreign exchange houses are completely immune to money fraud?
They are not.
With the level of financial dealings they are involved in, they attract huge money laundering risks.
Before we get into the financial theories, let's dig into what actually foreign exchange houses and money laundering means.
As stated, money laundering means illegally obtaining money by breaching the bridge of money transfer. Money laundering usually involves the method where the criminals disguise their illegal identity and origin, which leads to easy transfer of funds to the criminal’s side without jeopardizing their sources. The most common ways of money laundering are smurfing, opening shell corporations, and using mules which are traditionally famous. A few modern ways of money laundering are selling and buying commodities, gambling, counterfeiting, and investing in assets like real estate.
We live in an era where the easy money is the most attractive thing. People follow some unethical pathways that lead to easy money. In simple terms, we should expect financial breaches wherever the monetary flow is huge. Perhaps, money laundering risks can prove to be the worst thing for a society where it is used for drug trafficking and terrorist funding.
Think about it, all the money extracted illegally going to the wrong cause. Is it even fair?
Many financial institutions came up with certain software and acceptance of KYC objectives to combat the issue.
Money exchange houses stand for an individual or a business involved in dealing and exchanging the currency in UAE, the US, or any other country. Simply put, exchange houses convert the currency for the foreigners.
Did you ever try to find out if a particular currency has increased? Maybe you have been trying to visit a country for a vacation or stay permanently. You should know how foreign exchange houses help the expatriate population with money in such a case. The houses are exchanging the currency to trade different national currencies. It helps determine the nation’s economic health by comparing the exchange rate of different currencies. It also discovers the well-being of all the residents.
Money laundering is hazardous for the financial sector institutions and overall economic growth. It promotes corruption and crime in the economy, negatively affecting economic growth, and becoming a barrier to economic productivity. Money laundering brings in an unpredictable change in money demand and international capital flows fluctuations.
When we talk about social causes, money laundering risks put a massive strain on societal values. It allows the criminals to carry on illegal activities like drug trafficking and expand the illegal operations like smuggling or financial fraud. Money laundering can simply be explained as the transfer of economic power from the citizens, government, and market to the criminals.
Comprehensively, money laundering leads to dynamic challenges in the community. If the government aims at reducing the ability of criminals to get involved in illegal activities, they need to accept certain software. Anti-Money Laundering software like AML-TRACE helps the exchange houses to gather the exact information about the fraud.
AML-TRACE is an anti-money laundering software set up by SMART Infotech. The software is mainly focused on identifying unusual activities that can be a cause of financial breaches.
AML-TRACE follows the KYC objectives where it scans all the data of the potential customers and identifies if there is any abnormal activity. The records can be forged to execute a money-laundering plan. On the other hand, the software can pick out such activities and prevent any financial breach.
No business or industry is immune to financial breaches and therefore needs anti-money laundering software. Industries including banks, brokerage firms, e-commerce, auditors, exchange houses, law firms, real estate, and others are engaged in huge financial trades. These industries desperately need a strict check on their finances and a robust means to detect unusual transactions. Every nation trades with other nations. The inflow and outflow of money gather the public eye, leading to illicit activities causing money laundering.
Any developing country having a reputation for terrorist financing faces negative impacts on its development. A country as a whole requires the support of other nations to thrive and sustain itself in the competition. Foreign financial institutions have the authority to limit the dealings and transactions, and investments and be subject to additional scrutiny. Being tagged with money laundering leaves you limited access to the world markets and biased costs. Knowing all these drawbacks, financial institutions, exchange houses, and insurance houses should actively access the AML-TRACE software to surface the safety net.
Increased crime and corruption trigger the ardent need for an anti-money laundering system. AML-TRACE provides an effective and powerful framework to detect awkward activities. The negative effects of money laundering are unlimited on the development of the institutions and the country as a whole. Of course, there are some ways to minimize financial crimes.
AML-TRACE software helps financial institutions, exchange houses, and other developed entities. Following the KYC objectives (Know Your Customer) prevents regular financial attacks.
AML-TRACE is effective software that detects unusual activities in the financial system and helps institutions safeguard their financial information.