Today, business money flowing into an illegal vivacious circle has become a common scenario. In such cases, if you’re running a financial institution or any business that involves the circulation of monetary funds, you are at high risk. Laundering funds that get into the hands of criminals and disguised insiders might move into illegal transactions like drug dealing or weapon purchases- it has become arduous to trace such illicit transactions. However, there is space to prevent such money inflows and the AML compliance program is one successful technique!
What is an AML program?
AML stands for Anti Money Laundering program and is adopted by most financial institutions here in Australia. However, to understand what an AML program is and what it does, it is vital to know what money laundering means. Criminals involved in economic crimes might need to move their assets or money quickly into a black hole so that it actually becomes almost impossible to trace the money or the corruption. It is because dealing with illegally obtained money is a risky game- to play safe, most criminals use money laundering to invest their wealth in financial institutions and make them appear legal. The AML compliance strives to work against money laundering by mapping preventive laws and regulations.
Understanding the significance of the AML program
AML program ensures that you get to know the clients better, ensure that their investments are legal- by carrying out a background check. The prime reason why financial institutions must opt for an AML program is its high success rates. AML is a functional anti-threat regulatory program with rising enforcement actions across the years. Here are the best three out of the several benefits businesses can enjoy after opting for an AML program,
- Staying away from evolutionary threats
The advancements in technology have not just benefited businesses and techies but also cybercriminals. Cybercrimes occur via a group of cyber-enabled criminals, globally connected, to target businesses that have technical backlogs. Such criminals use sophisticated computer technology to stay anonymous and turn their transactions untraceable. Other criminal threat categories are lone-wolf terrorists who fund/ buy weapons, terrorist services via transactions with fast response times. Lastly, today we have e-commerce scams and criminals disguised as merchants to loot money.
An average of 164 cyber crimes happen in Australia every day, says a recent survey. These evolutionary threats are novel to business owners but can cause a vast threat to their institutions. So it goes without saying that bizarre cyber crimes rates are moving towards the north and, a system to know your clients, trace their transactions and backgrounds becomes crucial.
- Avert reputational threats
Reputational risks are common to all businesses. They can cause startups or even renowned institutions to fail pathetically. When you invest enormous sums of money into a business, it falls into a scam trap putting the reputation in jeopardy, the aftermath can be terrible. In such a scenario, the fact that money laundering scandals can happen via disguised insiders will eventually result in the loss of reputation- the upshot of uncertainty and poor customer trust tends to be client loss. However, financial institutions with AML compliance get recognised better and as a safe choice among the public.
- Passing over poor customer experience threats
Since the AML program focuses on customer relationships, the compliance staff stay in touch with the clients in many dimensions. As a result, you can quickly access details, order history, etc., verify and get back when your customer wants to have them. As a result, your business keeps away from poor data organisational skills or client experience!
