what-is-aml-and-why-is-it-important

1. What is AML and Why Is It Important? The advent of technological advancements and raging cases of illicit activities has made AML compliance a mandatory regulation. Anti-money laundering refers to the laws and regulations that deter criminals from impersonating illegally obtained funds as legitimate income. AML regulations require ?nancial institutions to actively monitor clients’ ?nancial transactions and report on suspicious activities to relevant regulators.    With the company’s growing digital presence and data complexity, AML compliance has become more of a fraud prevention solution than just being a regulatory measure. It is a crucial tool to safeguard companies from identity theft

2. and fraud. A comprehensive suite of AML solutions helps companies prevent illegal activities such as online theft, data breaches, terrorism ?nancing and more.  Why is Anti-money Laundering Important?  The estimated amount of money laundered globally in one year is 2−5 percent of the global GDP, or in the range of US$800 billion to US$2 trillion, reports AML preparedness survey 2020. AML compliance facilitates companies with several bene?ts as:   

3. Regulatory compliance: Bank Secrecy Act is the United States anti-money laundering law that was intended to combat money laundering. Later, it has been amended by the Patriot Act to prevent terrorism ?nancing. AML regulations require companies to abide by the law and implement a risk-based AML compliance program with accurate Customer Due Diligence (CDD) and perform ongoing monitoring to detect suspicious activities effectively. The non-compliance or negligence results in sanctions and hefty penalties. Since 2009, regulators have levied about $ 32 billion in AML-related ?nes globally Prevents Identity Theft: Anti-money laundering services allow companies to detect suspicious activities, deter fraud and mitigate risks involved in ?nancial transactions. A robust AML compliance program monitors clients’ transactions and prevents fraudsters from engaging in money laundering and terrorist ?nancing.  Lowers Financial, Reputational risk: Non-compliance with AML regulations attracts hefty ?nes and ?nancial losses. Further, it highly affects the reputation of companies and may lower their brand value resulting in huge losses. AML crisis or any negligence related to regulatory compliance also reduces their online trust. The negative mindshare of stakeholders seems a threat to the pro?tability and sustainability of the business. AML compliance can safeguard you from all such risks. It will save you a lot of money and effort in damage control of your business’s reputation.  Reduced Costs: AML compliance safeguards ?nancial institutions from regulatory ?nes, manual efforts by employees and IT costs, and capital reserved for risk exposure. Improved Client Experience: AML compliance program may require contacting a client multiple times. Friction amid the process often frustrates customers and worsens their experience resulting in high abandonment rates. AML compliance ensures frictionless onboarding preventing companies from losing potential clients.     How does IDMERIT Assists You?  IDMERIT’s AML solutions allow you to identify high-risk applicants by constantly monitoring transactions in an effortless way. Along with adherence to AML regulations, it identi?es bad actors and detects fraud before it happens. The AI-integrated API and automated AML solutions effectively analyze transactions, reports the hidden risk, and detect fraud before it happens. IDMERIT’s fraud prevention solutions will allow you to ?ag high-risk identities, match them against sanctions lists and mitigate risk in real-time.