UPDATE
January 2023

Why Anti-Money Laundering Is Important for businesses

Forex brokers must verify and protect against fraud not only for the benefit of customers but also to to comply with regulatory requirements. Furthermore, they need to make sure they can verify their customers’ identities under the Know Your Customer (KYC) regulations. Financial regulations like KYC are essential for building customer trust, protecting the brand from reputational damage, and complying with Anti-Money Laundering (AML). In addition, successful forex brokers must optimize their customer experience by reducing friction during the signup process to attract new clients.

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It is no secret that money laundering is a big problem. A lot of companies do not take the necessary precautions to prevent it. This is why anti-money laundering is so important for businesses. It can help them avoid criminal charges and keep their reputation intact. 

The compliance landscape for companies has changed dramatically in recent years, so many are turning to Anti-Money Laundering (AML) solutions to keep up with the latest requirements. AML compliance is no longer a choice for businesses – it’s a necessity. 

What is money laundering?

Money laundering is the process of converting funds from illegal activities into legitimate assets. This can be done through various means, including but not limited to real estate, businesses, and financial instruments. Money laundering aims to disguise the origins of the criminal’s funds so they can be used in legitimate ways without arousing suspicion. While it may seem innocuous, money laundering has serious implications. For one, it allows criminals to profit from their illegal activities and avoid detection by law enforcement.

How do businesses launder money?

Most money laundering methods involve using businesses as a front to funnel the money through. For instance, a business might buy goods or services from another business with dirty money and then resell those goods or services for clean money. Or, a business might report false income or expenses to move dirty money into their accounts without arousing suspicion.

What are the consequences for businesses that engage in money laundering?

When it comes to money laundering, the consequences for businesses can be quite severe. Engaging in such activity is a serious offense that can lead to hefty fines, jail time, and damage to a company’s reputation. In some cases, it can even result in the dissolution of a business. Money laundering is simply not worth the risk for most companies.

How can anti-money laundering measures help businesses avoid these consequences?

Theft, fraud, and other illegal activities can have devastating consequences for businesses. Anti-money laundering measures can help companies to avoid these effects by making it more difficult for criminals to access and use financial institutions. By requiring financial institutions to verify the identity of their customers and report suspicious activity, anti-money laundering measures make it harder to support criminal activity.

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Anti-money laundering regulations

The Financial Action Task Force

The Financial Action Task Force is the international standard-setting body for anti-money laundering and counter-terrorist financing. The FATF comprises 34 member jurisdictions and two regional organizations representing the most significant financial centers. The FATF has developed 40 Recommendations in the field of AML actions.

AML Directives

Within the European Union, The Directive is an umbrella framework issued periodically by the European Parliament. Each member state implements its own laws based on a common set of principles and definitions. In the newest 6th AML Directive issued on July 20th, 2021, the European Commission presented legislative proposals to strengthen the EU’s AML rules. The directive also includes a proposition for creating a new EU authority to fight money laundering. The goal is to improve the detection of suspicious transactions and close loopholes criminals use to launder illicit profits or finance terrorist activities.

Anti-Money Laundering Compliance

Financial institutions have a duty to comply with Anti-Money Laundering (AML) regulations. These rules are designed to prevent criminal organizations from using the financial system to launder money. AML compliance is a complex and time-consuming process involving analyzing customer data.

An AML solution helps companies automate the management of customer risk and compliance with government regulations. By automating these processes, financial institutions can save time and resources while meeting their regulatory obligations.

Anti-Money Laundering Solution

There are a lot of factors to consider when it comes to AML compliance and ensuring that the onboarding process is up to snuff. The first step is understanding what a business’s specific needs are to meet the guidelines set out by government regulations. This could include enhanced due diligence for high-risk customers or implementing a Know Your Customer policy.

Onboarding is a critical part of ensuring compliance with government regulations. Financial institutions can protect their customers from potential fraud by implementing an effective onboarding process.

The process can include several steps to verify the customer’s identity and ensure they are who they say they are. This may include collecting information such as a driver’s license or passport and pertinent financial information.

Fully-Verified’s identity verification solution is the most accurate and reliable way to onboard new users. Our state-of-the-art technology uses a combination of government-issued ID documents, facial recognition, and biometrics to verify someone’s identity in real-time. We provide an added layer of security for businesses of all sizes who need to verify the identities of their employees, customers, or partners. Our solutions can be tailored to match the needs of any client:

  • Our automated identity verification service enables people to verify their identity on their own. The process is fully digital and can be reviewed by our trained agents. The whole process can be completed in minutes on any device.
  • Live-Verify connects users to a trained specialist for immediate identity verification via live video. The solution enables conducting KYC with customers and confirming their identity in real-time by document validation and face verification.

Money laundering is a serious issue that can have devastating consequences for both individuals and businesses. An effective anti-money laundering (AML) compliance program that implements the KYC policy can help reduce the risk of financial crime and protect an institution’s reputation.

Discover the KYC platform for global customer onboarding

Streamline your onboarding processes. Experience unparalleled automation.

2022 in Fully-Verified​

January 2023 2022 in Fully-Verified​ It’s been an eventful year here at Fully-Verified. We’ve made significant strides in improving the accuracy and efficiency of our

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Fully-Verified was created as answer to its founders collectively losing over $150 000 to various types of fraud in their eCommerce businesses.