With technology advancing and constant regulatory updates, it becomes challenging to keep up with the pace. As per the latest regulations and updates, businesses and financial institutions are supposed to follow the KYC process. Money laundering is no more a case of financial fraud; it also ruins the reputation of the company and financial institutions. Since the stakes are so high, the preventive measures should be spot-on.
With violators coming up with novel ways to launder money daily, any due diligence conducted during customer onboarding is not enough to vet client details. Several businesses are exposed to high risks simply because of their negligence towards the details. For example, dealers in precious metals and financial institutions conduct high-value financial transactions with customers and entities worldwide. And these entities can be politically exposed or sanctioned.
Anti-money laundering transaction monitoring and KYC are made mandatory for companies, businesses, and financial institutions to scan the customers' backgrounds and connect with them only when they pass the test.
So, there is a high risk as fund transfers, and invoices are used to conduct illegal activities, conceal sources of funds & launder illicit money. As customer profiles and business activities change over time and you perform a one-off check, you also need to use an ongoing monitoring KYC system as part of the due diligence procedure. AML-TRACE carries out this process within minutes and saves the firm from non-compliance and reputational damage risks.
AML-TRACE maintains ongoing monitoring KYC ensuring that business activities are consistent with the risk assessed during onboarding. With AML-TRACE, this process is automated and thus delivers refined outcomes.
After a one-time setting, the officials must periodically examine PEP status, sanctions, and adverse media changes. Ongoing AML monitoring is imperative for financial institutions and regulated entities that aim to maintain the efficacy of the anti-money laundering/terrorist financing programs.
Unsurprisingly, the official heads are subject to change and constantly update the KYC and ongoing monitoring norms.
Let’s discuss online monitoring and the KYC process.
Ongoing monitoring is the process that most companies, businesses, and financial institutions adopt to ensure the consistency of business relationships.
On the other hand, the KYC process is expanded as Know Your Business which means a proper and detailed run-through of the background of the clients and customers.
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Whether you are a real estate agent, have an international money service business, or deal with clients abroad, ongoing monitoring of KYC keeps you in the loop with the changing risks. It helps you achieve AML compliance as you avoid exposure to financial crimes.
Here are some ways in which ongoing anti-money laundering transaction monitoring helps maintain optimum business health:
Several countries have lists of sanctioned entities or individuals with whom you are advised to maintain certain reporting norms or not conduct business. At the same time, some countries do not feature on any sanctioned/watchlist and yet are posed as high risk in terms of money laundering and terrorism financing.
These are generally less developed countries that are prone to internal conflicts & frequently changing governments. Political patronage usually allows for adopting a dishonest approach to financial crime. It increases corruption levels and reduces the control set by regulation. For firms operating in such countries, a configurable ongoing compliance tool–AML-TRACE–averts your business from being subject to money laundering.
With time, one of your reputed clients may become a PEP as they may get appointed in a global banking outfit. Another reason could be their winning an election. Due to high-profile embezzlement, a client may even be featured in the updated watchlist or appear in adverse media searches.
Another long-established client may relocate to a country in the EU that 5AMLD/6AMLD and GDPR regulate. These changes in the customer risk profile call for a review of risk assessment and compliance approach.
Business relationships with PEPs or close associates, clients belonging to a high-risk industry in sanctioned countries, or on a watchlist are deemed high risk. AML-TRACE helps you generate up-to-date data when checking the clients for the level of risk exposure.
Besides, it is an anti-money laundering software that carries out transaction monitoring in an automated manner. This automated compliance process ensures that your business is up to date with any changes related to your customers. It also works as a feedback mechanism for management.
AML-TRACE has been an effective and successful addition to businesses and companies. The software is automated and delivers accurate information. Conducting the AML transaction monitoring process is critical and challenging, which is handled with perfection by the automated software.
While wreaking havoc worldwide, the pandemic has also brought about a dramatic shift in the economic and financial scenario. On the one hand, rising unemployment has driven bad actors to use charity foundations and other business activities for financial fraud. At the same time, market volatility has doubled the price of cryptocurrencies. It has driven individuals to keep dirty money in virtual wallets.
Money transfer businesses have seen a rise in transactions with high-risk countries as stranded migrants send money home. Digital wallets and eCommerce businesses have grown exponentially with the recent spike in demand for contactless home deliveries & digital payments. Stay ahead of your competition by reaping the benefits derived from the AML TRACE software.