Anti-Money Laundering

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What is Anti-Money Laundering (AML)?

Financial institutions are the most prominent users of AML legislation, as they are compelled to report any suspicious behavior to authorities. However, financial institutions are not only obligated to report suspicious behavior. Still, they are also at a higher risk of money laundering since they provide credit to consumers who open accounts with the company.

Why Is AML Compliance Important?

The amount of money laundered globally in one year is believed to be 2% to 5% of global GDP, or $800 billion to $2 trillion – and this is a low estimate. Money laundering is frequently associated with illegal arms sales, smuggling, embezzlement, insider trading, bribery, and computer fraud schemes. It’s also widespread in organized crime, such as human trafficking, weapons or drug trafficking, and prostitution rings.
  • Compliance with regulations requires them to monitor consumers and transactions and report questionable activities.
  • Protection of their brand’s reputation and shareholder worth.
  • Avoidance of consent orders and potential civil and criminal fines for disobedience or negligence.
  • Cost savings from fines, staff, IT expenditures, and funds set aside for risk exposure.
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