The menace of money laundering had a catastrophic effect on several economies, causing damage of immeasurable kind. The plan AML has been piloted since those times and it comes with a full-throttle this time.
It's not that governments haven't been doing anything. Even if it's reactionary, the level of penalizing banks for these offenses and warnings for compliance officers has gone up. People in the government are making arduous efforts to stop the miscreants from wrecking the economy.
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Seems like a miniature of an AML program can test the waters. Otherwise, some AML programs had devastating effects on financial institutions, leaving them with nothing at all. Here, in the following, we highlight the ways to achieve the perfect AML program using practical methods.
1. Tying up with technology partners
It isn't a newly discovered thing. For ages, institutions and technology have enhanced their capabilities of detecting thuggish behavior through data and reporting. Regulators can take the help of modern AML screening software with real-time compliance monitoring for achieving outstanding results.
Regulators or financial institutions find rigid kinds of regulatory challenges, which can push anyone backward. With the help of a reliable and apt technology partner, regulators or financial institutions can put a lid on this. Moreover, it proves advantageous in streamlining data and reporting.
2. Conducting independent audits
Pulling it out perfectly, the AML policy must match with what's on the to-do list of independent auditors. Indeed, financial institutions have their AML policy uniquely designed to stop the money laundering process, the independent audits will tell the story of risk assessment, guidelines, record retention, etc. according to international standards. Based on these reports, the auditors may offer their findings and recommendations for the regulator to review on it.
3. The need and necessity of EDD
Enhanced Due Diligence (EDD) processes include identifying accurate data about customers from various verified sources, verifying sources of income, demystifying the account activity of a suspect customer. For this reason, several organizations have incorporated KYC screening and topped on information collection. However, a few financial institutions have called trouble for themselves by not following KYC rules and regulations, thus, compromising and risking their assets.