This is mainly because of the implementation of AML and due diligence policies and procedures in banks & other financial institutions. The corner stone of a strong AML compliance program is the adoption and implementation of comprehensive policies of CDD (Customer Due Diligence) for all corporate and retail customers; particularly those that present a higher risk of money laundering and terrorist financing. Now the CDD and KYC is not only limited to onboarding new customer but also for the existing customers in an institution, on an ongoing basis. This is how the AML frame out helps in detecting the money laundering and terrorist financing. The compliance responsibility is a wide deep ocean of managing information gathering, documentation, assigning risk level and so on.
Actimise CDD brings together the critical due diligence and KYC functions for better identify, manage and mitigate customer related risks while preventing regulatory scrutiny and customer dissatisfaction.Due diligence is an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations.
A set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions. In most cases money launderers hide their actions through a series of steps that make it look like money coming from illegal or unethical sources was earned legitimately. Though anti-money-laundering laws cover only a relatively limited number of transactions and criminal behaviors, their implications are extremely far reaching. The onus to perform these procedures is on the financial institutions.
Many regulatory and governmental authorities issue estimates each year for the amount of money laundered, either worldwide or within their national economy. The Financial Action task Force (FATF), an intergovernmental body set up to combat money laundering. Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance. Various estimates of the scale of global money laundering are sometimes repeated often enough to make some people regard them as factual, but no researcher has overcome the inherent difficulty of measuring an actively concealed practice.
The more the financial institution vigilant, the less or no the money laundering happen. Currently many AML Compliance software’s are there in place to detect and avoid money laundering activities. Financial institution should strictly adhere to the guidelines of the AML regulators and other International bodies. The AML policy and procedures applies to all financial products. A complete KYC and Due-Diligence process is mandatory before dealing with any type of customer.
BIJOY BABU
(IIBF Certified AML Officer)