Anti-money Laundering Provide Currency Transaction Reports


Anti-money Laundering Provide Currency Transaction Reports

  17-Nov-2020
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As there is an increase in money transaction activities. It has been observed that in past few years, instances of money laundering have been increased. These incidences have become very challenging for finance sectors and financial institutions. This has resulted in increased adoption of anti-laundering software. The escalating number of cultured cyber-attacks have raised the concerns of significant losses in a number of industries and organization. It is the need of the hour to adopt Anti-money laundering (AML) software in order to get protected by this criminal activity. The increasing volume of global transactions has also driven the deployment of AML solutions in financial institutions, and banks.

How money laundering has become a threat?

Cybercriminals do a deep study of the organizations and discover all the possibilities and situations that are susceptible to commit fraud. They carry out ransomware attacks, in which they demand virtual currencies such as Bitcoin, Ripple, and Ether. Since these virtual currencies are not issued or preserved by any central organization of the country, that is why it has become a soft target of money ransom for laundering activities.

What do we understand by Anti-money Laundering?

Anti-money Laundering means the rules, regulations, laws, policies, and procedures planned in order to prevent the illegal money laundering activities by criminals who try to gather funds as a legitimate income.

Anti-money laundering (AML) software is one of the solutions that allow banks and other financial institutions to monitor and observe the customer’s behavior for suspected criminal financial activities with the help of automated processes.

Types of Anti-money laundering (AML) software

Several types of AML solutions are available including customer’s identity management, currency transaction reporting, transaction monitoring, compliance management, etc.

Currency Transaction Reporting

It keeps a record of the transactions done by the customers. The adoption of these software has brought a revolution in the financial sectors to deal with money laundering and financial crimes.

Compliance Management

It is a program that is used to track, monitor, and audit the activities of the businesses. Compliance Management software in AML solutions is helpful for the managers to handle a wide range of regulatory and compliance processes. So they perform a risk assessment and ensure accountability in the organization.

Transaction Monitoring

Since monitoring the transactions is an important part of the regulatory requirement under AML obligations. The Transaction Monitoring software helps the financial institutions and banks regulate the transactions processes automatically and more efficiently.

Customer Identity Management

This software offers the organization to securely capture the identity of the customer and manage it with safety. It also controls the customer’s access to applications and services. This software can be deployed in private clouds or on-premises.

Advantages of Anti-money Laundering software

  • It is helpful in ensuring the legal requirement of financial institutions and other such organizations.
  • They play a very important role in the detection and prevention of financial crimes.
  • It is beneficial for financial organizations to control the activity of their customers at a faster rate and in a very safe way.
  • AML software offers transaction monitoring features that detect the unusual transaction done by the customers.
  • Most of the financial crimes are done by financial transactions. With the help of AML software, the receiver and sender’s financial transactions can be detected within a matter of seconds.
  • A regular check can be done by the organizations about the transactions of the customers.

Major limitations of Anti-money Laundering

  • Lack of skilled employees: There is a lack of skilled professionals who have in-depth knowledge about the AML software.
  • Increased governance: the financial institutions have to manage multi-jurisdiction for AML –compliance and also have to face cross-border challenges.
  • Complicated processes: AML compliances requires financial institutions to put multiple intricate processes and technology, for which they need to advance their infrastructure.

To sum up

The Anti-money Laundering Market has been witnessing rapid growth due to the high usage of digital platforms, there is an increasing amount of data on networks resulting in increased load on the infrastructure security of financial institutes, and banks. Since anti-money laundering (AML) solutions are used by banks and financial sectors to analyze customer data in order to discover doubtful transactions within a specified time. With the swift developments taking place in data science, AI, machine learning, and big data that are showing as very effective technologies for AML solutions.

Also, advancement in technology comprising AML solutions for cryptocurrencies and the arrival of AI & cloud-based AML solutions has resulted in creating lucrative opportunities for the market. The growing focus of financial institutions on the issues related to digital payment, increasingly strict regulations, and passivity for AML are some of the major factors that are driving the market towards growth. The Global Anti-money Laundering Market has been anticipated to rise at a growth rate of 18.3% CAGR over the forecast period.