5 Strategies to Successfully Combat Money Laundering

5 Strategies to Successfully Combat Money Laundering

As technology advances and marketplaces grow more interconnected, identifying and tracking money laundering activities has also become more sophisticated. Financial authorities ought to be able to identify the source of funds using a quick and accurate approach to detect criminals in the early phases of money laundering. How do corporates, financial institutions and law enforcers successfully combat money laundering activities?  

Make Technology Work For You to Increase Your Search Results

It’s becoming increasingly difficult to distinguish between severe potential dangers and the plethora of false positives that appear in searches. Artificial intelligence (AI) and other forms of technology that do continuous searches can help anti-money laundering (AML) inspectors by reducing false positives and broadening searches. Instead of having someone go over all of the warnings by hand, you could employ technology to look at a larger number of them. It expands coverage while allowing people to concentrate on high-priority accounts.

Cross Communication Must Occur Consistently 

New scams are reported to banks by law enforcement, although banks typically find these schemes before the police do. Hence, banks and law enforcement can keep each other informed, confirm any concerns, identify potential networks and build public-private cooperation by holding frequent meetings. This will result in a united front against money launderers.

Data Analytics Can Be Used to Find Patterns

Data analytics must be put to good use to combat money laundering. Anti-money laundering officials can construct client models that include risk tiering and daily negative news warnings when suspicious tendencies are detected. The goal is to assess a customer’s risk in real-time as soon as they enter a bank. Not even two or three days after the occurrence because, by then, the money will have been deposited and will be gone in a matter of days.

Streamline Your Processes

Many banks have grown by taking over their smaller rivals, resulting in a patchwork of antiquated computer systems. Spreadsheets are used by some divisions, while others use ledgers. This structural mismatch can hinder antifraud efforts by making it difficult for various branches to interact effectively with each other. More financial institutions are transitioning to a digital world, increasing their usage of cloud software and big data; tools that they exploit to standardise processes and communication across the entire company. 

It’s Critical to Have Structured Training

Anti-money laundering officials must be aware of what to look for. Officials will receive remedial training, and the entire bank will be put through its paces regularly. Because front-line employees are your first line of defence, teaching them how to recognise suspicious activity is critical. 

Money launderers must be monitored by all financial institutions, from large banks to their smaller counterparts. Bigger financial institutions can tackle more sophisticated money launderers successfully by combining due diligence technology with human training and a strong relationship with law enforcement agencies. 

Curb Money Laundering with Global Radar

As money launderers innovate in their quest to clean their ill-gotten gains, financial institutions are also doing the same with the help of companies like Global Radar. With Global Radar’s AML transaction monitoring module, financial institutions can stop money launderers in their tracks. The software helps to detect unusual trends and behavioural patterns. It records transactions using both rules and statistically driven methods. Other benefits  include customisation capabilities, automatic review of transaction patterns and behaviour profiling, creation of a large library of reports to meet the reporting needs of management as well as the configuration of alerts based on transactions. 

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