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IdentityMind Presents: Anti-Money Laundering

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IdentityMind’s SuperiorAML solution includes Trusted Digital Identities, transaction monitoring, case management, rules and alerts. IdentityMind increases both speed and accuracy of compliance and risk management.  While a fully manual AML process can be highly resource intensive with varying quality across individual analysts, ldentityMind delivers automated transaction monitoring that is fast and consistent across any volume. Rules can be set to automatically approve some transactions, decline others, and flag yet others for manual review as needed.

At the heart of our SuperiorAML solution is a SaaS platform that securely tracks the entities involved in each transaction (e.g. consumers, merchants, cardholders, payment wallets, alternative payment methods) to build identities with verified reputations.  These reputations, along with IdentityMind’s powerful automation capabilities, allow companies to easily and quickly identify and reduce potential fraud, to onboard accounts, to perform KYC, and identify and to report suspicious activity for money laundering.  

White Paper

Goldmoney Case Study

Sponsored by IdentityMind | January 12, 2018

Goldmoney uses IdentityMind to automate their KYC, Anti-Money Laundering, and Fraud Prevention activities. Our scalable solution allows uninhibited growth and our automation, machine learning, and easy-to-use rules allowed Goldmoney to focus on expanding their business. 

White Paper

Trusted Digital Identities

Sponsored by IdentityMind | January 5, 2018

Read this white paper to learn more about why it is crucial to develop digital identities which look at more than static data, and how introducing digital attributes such as online behavior and transactional history creates a much more robust system where trusted identities and suspicious identities evolve differently, making it easier to tell them apart.

White Paper

Forrester's Vendor Landscape: Anti-Money Laundering Solutions 2017

Sponsored by IdentityMind | January 5, 2018

In this comprehensive report, Forrester explains that Anti-Money Laundering (AML) programs are key for companies that facilitate financial transactions. When selecting the right AML technologies, you should consider the broader financial crimes prevention and risk management architecture within which AML sits.

White Paper

The Sanctions Screening Whitepaper

Sponsored by IdentityMind | January 5, 2018

The IdentityMind white paper provides important background and tips to improve the sanction screening process. Learn how false positives can be minimized using matching algorithms, ways to apply risk integrated rules to configurable lists, and how their technology can help to eliminate wasted effort and improve results.

White Paper

Balancing Risk Management & The Mobile User Experience

Sponsored by IdentityMind | July 10, 2017

This guide provides ideas on how to combat fraud while maintaining an inviting user experience.

White Paper

Best Practices for Mitigating Fraud in the Onboarding Process

Sponsored by IdentityMind | July 10, 2017

IdentityMind created this Best Practice report for online lending executives looking for ways to integrate strong identity verification into the loan origination and customer onboarding process.

White Paper

Digital Identity Evaluation Guide

Sponsored by IdentityMind | July 10, 2017

This guide provides a framework that will help you think through your strategy with a focus on the functionality and technology that can help you achieve the right acquisition, risk and compliance balance.

White Paper

KYC Fundamentals Guide

Sponsored by IdentityMind | July 10, 2017

An essential guide to getting to know your customer (KYC).

What is money laundering? 

Money laundering is a criminal process in which illegally-gained revenue is made to appear legitimate through a number of transactions within the legitimate financial system. In this manner, so-called “dirty” money is made to appear “clean,” by obfuscating its origin.

Money laundering is often conflated with terrorism financing, since the methods used to channel funds into terrorist networks often make use of money laundering to do it.

How does money laundering work? 

First, money is secretly introduced into the legitimate financial system. There are many methods for this, such as use of cash-intensive businesses to make the funds look like they are part of a legitimate cash flow, buying real estate, smuggling the cash in bulk to another jurisdiction and then introducing it into the financial system there as legitimate funds, use of money services businesses such as check cashers or stored value cards, or running the money through various shell companies and trusts to obscure its origin and owner.

Then, the money is often transferred between multiple owners to further confuse its sense of origin and ownership. 

Finally, once the money is considered to be “clean,” it is transferred into the legitimate financial system as ordinary currency that no longer has an obvious connection to criminal activity. Once illegal proceeds no longer have a clear trail connecting them to their point of origin, the money is considered to have been fully laundered.

How do you report money laundering? 

While anti money laundering regulations vary, financial institutions are generally expected to file a Suspicious Activity Report (SAR) to government authorities, typically within 30 days of detecting any signs of potential money laundering activity, such as cash transactions over $10,000.

In the United States, financial institutions such as banks must use the Bank Secrecy Act BSA E-Filing System to submit an SAR. Futures commission merchants (FCMs) and introducing brokers (IBs) must use Form 101, Suspicious Activity Report by the Securities and Futures Industries (SAR-SF). Commodity pool operators (CPOs) and commodity trading advisors (CTAs) are not yet required to file SARs, but are encouraged to do so voluntarily, also using the SAR-SF.

The United Kingdom suggests SARs be reported through the SAR Online system, which provides instant acknowledgement of the report, as well as a reference number. SARs in the UK are overseen by the National Crime Agency.

What is AML?

Anti money laundering, or AML, are those rules, policies and procedures established by government regulators and enforcement agencies, to prevent the activities and financial transactions that are meant to hide the true origin of money (especially that which is generated illegally). Government agencies that oversee AML law typically also issue AML guidelines to aid with their compliance.

In the United States, the first AML regulations were codified by the Bank Secrecy Act of 1970, and have since been updated by other pieces of legislation, including:

  • the Money Laundering Control Act (1984)
  • the Anti-Drug Abuse Act of 1988
  • the Annunzio-Wylie Anti Money Laundering Act (1992),
  • the Money Laundering Suppression Act (1994),
  • the Money Laundering and Financial Crimes Strategy Act (1998),
  • the USA PATRIOT Act (2001)
  • the Intelligence Reform & Terrorism Prevention Act of 2004

The United Kingdom’s AML regime are codified by:

What is AML compliance? 

AML compliance programs are the formal set of internal policies, procedures, and controls that 1) oversee all internal monitoring for signs of money laundering activities, 2) report said activities, and 3) independently test those first two capabilities to ensure they are working properly. Many industries within the financial services sector are required to have a formal AML program, which must be in writing, and must include a formally designated compliance officer, ongoing employee training, and an independent audit function to test the program. 

In the United States, the Financial Industry Regulatory Authority—a self-regulatory organization, has also set forth minimum standards for AML compliance programs under FINRA Rule 3310

The USA PATRIOT Act amended the Bank Secrecy Act to require various financial institutions to formally adopt AML compliance programs. Similar laws mandate AML compliance programs for mutual funds; credit card companies; money service businesses; broker-dealers; insurance companies; and dealers in precious metals, stones, or jewels.