Considering the rise in digital advancements, industries are falling prey to various threats, mainly identity theft, money laundering, and much more. Criminals are bringing in advanced methods that are questioning the authenticity of manual methods. Moreover, with the ease provided by digitally advanced tools, criminals are committing various types of money laundering.
United Nations Office on Drugs and Crime (UNODC) reports that worldwide money laundering accounts to be over $2 trillion per annum. However, with efficient AML solutions in place, industries can overcome this dramatically rising threat. With the rise in automation and online shift, criminals are becoming more sophisticated. This requires more efficient and digital anti-money laundering checks. The blog covers money laundering types and how AI-enabled digital onboarding solutions help counter them.
AML Security Checks – Combating Money Laundering Types
Mobile technology, the digital shift of industries, online banking, and other such advancements are paving the way for criminals. They commit data breaches to steal information of legit clients, use fake information, or camouflage identities to escape the anti-money laundering checks. As per Shufti Pro News, this helps them launder big sums of money into legitimate industries.
Moreover, the sectors that authorities do not regulate are more likely to become a target. Ranging from banking, real-estate to trade, casinos, and art, every industry is the target of criminals. Details regarding the types of money laundering are discussed in the next section:
Money Laundering in Bank
Money laundering through banks is the oldest and most common type. It further involves two types, criminals using banks or other financial firms to transfer illicit funds or self-ownership by a money launder. However, this is the main reason why anti-money laundering regulations like the Bank Secrecy Act and AMLDs were put into place.
Moreover, the advanced methods help them bypass the AML verification checks. Moving further, criminals also use other methods like owning a bank, insurance firm, or any other financial institution, which largely helps them launder big sums of money. This way they easily dodge anti-money laundering monitoring by regulatory bodies. With efficient AML checks in place, regulatory bodies can identify these criminals and keep track of firms possessing such threats.
Money Laundering in Real-Estate
This is one of the major types as the sector deals with a huge flow of large cash amounts. Criminals use their ill-gotten funds to buy or invest in properties that help them escape the AML compliance checks. They are clever enough and do not keep the purchase for a long time. After they sell it to some third party, the real source of funds is hard to track.
Shufti Pro Funding indicates that AI-powered AML services help buyers and sellers to verify customers prior to finalizing a deal. With its robust checks, digital onboarding services not only help real estate to detect suspicious transactions but also verify customers. AML solutions enable companies as well as sole dealers to access global records that further ensure safety and prevent money laundering.
Money Laundering in Casinos
Casinos are holding a well-earned reputation because they serve as easy targets for criminals to launder money. They enter or sign up the casinos with hefty amounts of ill-gotten money, use it for gambling, and reimburse it. This way they walk away with clean money in exchange for their illicit funds. Evidently, casinos, especially after shifting online lack AML compliance programs. This gives criminals a free hand to launder funds.
This calls for casinos both physical and digital to incorporate better AML screening checks. They will not only identify criminals before placing bets but also track their activities to ensure they don’t launder money in the future. Where casinos also serve as the mediums for organized crimes, AI-enabled AML solutions help identify and counter them in time.
Trade-Based Money Laundering (TBML)
TBML is a fastly emerging trend. As per the definition by Financial Action Task Force (FATF) defines, it is the process where criminals move their illicit funds through trade and cross-border transactions. TBML mainly includes multiple, over-, or under-invoicing of products, services, and goods. It also involves false descriptions of goods. This helps criminals escape the anti-money laundering checks.
Furthermore, companies involved in this type of money laundering pull off this maneuver by either showing fake prices, generating false invoices, or giving incomplete descriptions. To identify and combat all of these activities, industries require efficient AML solutions. With its services like access to global databases, digital onboarding solutions help businesses identify global offenders as well.
Digital AML solutions help industries, firms, and other institutions fight money laundering. With its robust identity checks, it not only identifies customers in real-time but also tracks their activities. While criminals are using different forms of money laundering, AML screening solutions help counter them all. Ultimately, industries can safeguard their operations while staying in line with the regulations.