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KYC for Banking – Made Simple with iComply

KYC for Banking – Made Simple with iComply

by | Apr 10, 2023 | Blog, KYC, News & Events

KYC for Banking – Made Simple with iComply

Is your banking institution set up for success and compliance in 2023?

With the financial and digital asset markets experiencing a tumultuous time after the extreme fluctuations faced during the peak of COVID-19, there’s never been a more important time to double down on your Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols to ensure your organization is adequately prepared to face evolving legislation and overcome the risks associated with criminal activity.

2023 is expected to bring an increased focus on the importance of KYC efforts. As a result, banks need to be ready to pivot when needed to avoid being left behind or being found to be non-compliant with jurisdictional standards.

At iComply, we know the value of staying on top of KYC standards and are proud to partner with leaders in the finance, banking, and related securities-focused industries to provide world-leading Know Your Customer (KYC) technology. We know AML and KYC play an integral role in helping to dismantle criminal networks across the globe; our goal is to deliver a modular suite of digital KYC solutions that upholds the latest standards to keep you and your clients safe.

Below, we’ll take a closer look at some of the core basics of KYC practices within the banking industry, and why it’s integral to partner with an automated software provider you know you can trust.

A Strong Foundation: KYC Fundamentals

It comes as little surprise that the banking and financial sectors are a primary target for criminals globally. The staunch increase in financial and cybercrimes has led to them becoming a predominant source of concern amongst global legislators, and financial fraud (e.g. money laundering) remains at the top of Interpol’s list of future crime threats as of 2023 (source listed above).

While the current realities of cybercrime and financial fraud paint a bleak picture, they also impart an invaluable message: now, more than ever before, the global community faces significant and growing risk if institutions choose to ignore security protocols.

To prevent the prevalence and ease with which identity fraud, money laundering, and other white-collar crimes are committed, institutions must adhere to the core standards of KYC protocols which aim to:

  • Establish a verified customer/business identity;
  • Evaluate and accurately assess said identity’s known activities, associations, existing sanctions (where applicable), and other relevant factors; and
  • Develop a vetted risk profile based on the information above, one that allows for Enhanced Due Diligence (EDD) as needed to determine further alignment concerns like known involvement with terrorist funding, illicit activities, and questionable sources of funding.

Implementing electronic KYC (eKYC) technology and software like iComplyKYC simplifies compliance procedures and dramatically reduces the risks associated with onboarding new clients and forming partnerships with unknown third parties. Trusted software platforms like iComply also help reduce internal redundancies and streamline operations by removing the risk of manual errors, allowing your team to focus on other key factors that keep you ahead of the curve when it comes to avoiding criminal activity and fines.

Your Partner in Compliance: iComplyKYC

eKYC platforms like iComplyKYC play an integral role in helping to circumvent the many threats caused by fincrime, and aid banks and financial institutions in moving away from the risks and inefficiencies associated with manual KYC procedures. As we continue to move forward in a world with more digital banking users than ever before, partnering with the right AML and KYC software is essential for success.

iComplyKYC is proud to be a game changer in the world of compliance, offering users a truly end-to-end solution that utilizes edge computing to process sensitive user data directly on the user’s device, instead of leaving it susceptible to risk in the cloud or an unvetted third-party vendor. Our modular suite of programs is designed to be compliant with legislation from nearly 250 jurisdictions across the globe and can help your company reduce overhead, lowering the cost of KYC operations by up to 80%.

Whether you’re hiring, assessing your current customer database, or building the foundation to ramp up your operations for the rest of the year, iComplyKYC offers you unparalleled safety and security in the form of an intelligent, customizable platform that can be set up in minutes.

Don’t believe we’re truly end-to-end? Let us show you.

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At iComply, we know that the world of digital securities and compliance moves fast, and staying on top of rules and guidelines can be tricky while managing deadlines, bottom lines, and day-to-day operations. We’ve streamlined iComplyKYC to make it as easy as possible to stay compliant, screen for risks like AML, conduct Enhanced Due Diligence and implement Daily Ongoing Monitoring, all within a single platform.

Book a demo with our team today to learn more about iComplyKYC and how our platform can be used for your specific needs and applications.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

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How to Spot Fraudulent Users with KYC Protocols

How to Spot Fraudulent Users with KYC Protocols

by | Apr 10, 2023 | Blog, KYC, News & Events

How to Spot Fraudulent Users with KYC Protocols

While we often speak about the many risks and crimes that Know Your Customer (KYC) protocols help to circumvent (the reactive approach), the cybersecurity industry can sometimes forget to highlight the specific ways KYC software and practices offer protection (the proactive approach).

With the number of digital users rapidly expanding globally, knowing how to accurately verify someone’s ID and assess their true risk profile is essential to ensuring compliance and upholding important safety standards set by your local jurisdiction.

2023 has shown that the exchange of digital assets and a more competitive than usual marketplace have driven technological advances further than ever before. Staying on top of evolving trends, while still remembering the core basics of Customer Due Diligence (CDD), are two of the best ways to keep your business as well as your clientele safe from evolving cybercrime, fraudsters, money laundering (AML), and many other types of financial and identity crimes.

Below, we’ll take a closer look at some of the fundamentals of spotting fraudulent users in your database. Read on to learn more

Focus on Specific Areas of KYC Documents

While KYC processes and verification documents are unfortunately unable to provide 100% security against fraud and criminal activity, they do play a valuable role in catching key details that may indicate a higher risk profile and/or uncover problematic associations that allow your organization to act accordingly. When reviewing documents like a passport or driver’s license, it’s important to closely review everything submitted and evaluate data points like:

  • Identification photos,
  • Full name,
  • Date of birth,
  • Expiry date,
  • Document number,
  • Address,
  • and more.

With personal identity documents being one of the most popular commodities on the black market, knowing how to spot inconsistent details is one of your best lines of defense, and having automated solutions in place—such as iComply’s modular suite of KYC programs—helps to remove the risk of human error or oversight.

Cross Reference Materials and Verify Photos

One of the most important parts of KYC is ensuring your verification process doesn’t exist in a vacuum. Using multiple points of reference, including more than one document, and being able to compare passport/ID photos with a live representation of an individual all help to reduce fraudulent users. The more databases you are able to (safely and legally) access to conduct your verification, the stronger your confidence can be with regard to the validity of the identities in your system.

iComplyKYC conducts CDD and EDD using some of the world’s most trusted record bases, giving you access to the information you need to move forward, while still respecting ethical guidelines pertaining to accessing private information.

Triple Check All Information and Little Details

Any information contained in the Machine Readable Zone (MRZ) should clearly match the standardized setup of the document in question. For example, passports should have issuing and expiration dates that match up, font types should align, and any other security details (e.g. reflective strips) should be consistent with all government-issued documents. If any detail seems questionable, the application and/or user should immediately be flagged and escalated for further review.

Manual vs Automated Review

While manual document review may be effective on a small scale, the reality is often inefficient when it comes to keeping up with onboarding, constant re-evaluation, and adjusting to shifting global regulations. Automated software solutions like iComplyKYC help you navigate complicated KYC processes with confidence and ease, allowing you to focus on your business operations while still remaining compliant. Our world-leading end-to-end suite of KYC + KYB software is able to integrate with existing frameworks in a matter of minutes, mitigating headaches and removing the frustration of downtime during adoption.

iComply is proud to partner with businesses across North America and Europe to ensure you have everything you need to stay compliant and ahead of the curve when it comes to circumventing criminal activity through your organization. Learn more about how you can stay ahead of evolving AML and fraud standards, and discover why iComply is your leading choice for software solutions by talking to our team today!

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

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Eye On Compliance in 2023: Top KYC Trends

Eye On Compliance in 2023: Top KYC Trends

by | Apr 3, 2023 | Blog, KYC, News & Events

Eye On Compliance in 2023: Top KYC Trends

As Q2 of 2023 ramps up, the compliance industry continues to face a fast-paced environment of global changes and challenges when implementing protective measures against fraud, money laundering (AML), and other forms of financial crime (FinCrime). 2022 brought no shortage of showcase incidences highlighting the importance of compliance measures; with an estimated 90% of FinCrime activities still going undetected, it’s more important than ever to stay on top of evolving practices and emergent data to build a safer global marketplace for all.

At iComply, we recognize how vital KYC and AML measures are when it comes to circumventing crime and ensuring your business is aligned with all relevant regulations. Below, we’ll take a closer look at some of the most prevalent trends and points of consideration emerging in 2023, as well as why partnering with a trusted software platform like iComplyKYC is one of the best ways to streamline your compliance. Read on to learn more.

Core Takeaways

Before we delve into some of the more specific factors to be aware of in 2023, it is worth noting that the compliance industry as a whole—as well as financial institutions subject to regulation—need to be aware of the following 3 major themes at the forefront of AML and KYC protocols:

  • Adapting to upcoming legislation
  • Embracing proactive strategies
  • Investing in continued education and training

While the uncertainty arising out of COVID-19 led to a brief slowdown in the addition of new regulations and difficulty in amassing concrete statistics with regard to AML and fraud, there is no denying that we have seen a marked increase in fraudulent activity, specifically in cybercrimes. Ransomware, targeted phishing campaigns, evolving digital scams, and other crimes committed through “cyber-enabled” means have risen to the top of Interpol’s risk profile for fraudulent activity. Making sure your organization is aware of and implementing the new recommended standards resulting from these activities is crucial.

In addition to a significant increase in cybercrime, 2023 AML and fraud prevention focal points include:

Addressing New Geopolitical Risks

The ongoing conflict between Ukraine and Russia has highlighted the importance of monitoring sanction lists and maintaining Know Your Customer (KYC) and Enhanced Due Diligence (EDD) protocols that are able to adapt quickly to changing circumstances. International sanctions can lead to an increase in the risk of money laundering, with criminals becoming ever more creative with their methods of circumventing regulations and restrictions; this means financial institutions and digital asset management firms must be hyper-vigilant when it comes to spotting fraudulent or criminal users and dealing with them swiftly and effectively.

Monitoring Digital Assets

As major scandals like the sudden collapse of FTX in late 2022 have reminded us, the growth of digital asset markets like cryptocurrency exchanges has presented unique challenges when it comes to monitoring and accountability. With 2023 ushering in the implementation of regulations like the Financial Action Task Force’s Travel Rule (Recommendation 16), and with the EU poised to approve an upcoming Markets in Crypto-Assets (MiCA) Regulation, businesses and institutions need to be ready to pivot accordingly—especially as more stringent guidelines are being designed to safeguard against digital fraud and other forms of cybercrime that go undetected.

An Increase in “Challenger” Banks and Alternative Payment Companies

The number of alternative payment companies and “challenger” (aka “Neo” / “digital”) banks across the globe have increased significantly in the last few years, and international regulators have grown concerned with ensuring they are subject to the same (if not higher) level of compliance standards. Decentralized banking systems present a high risk for fraudulent activities without the proper measures in place, and such institutions should anticipate the arrival of more legal safeguards that help keep criminals at bay in the coming months and years.

Facing the Challenges of Digital Identities and the Metaverse

COVID-19 accelerated the shift to a more prevalent online global community, with users worldwide adopting digital avatars through venues like Meta and utilizing other services that enable an online persona. While the metaverse remains in its fledging stages, it presents a very real threat and a high potential for money laundering, human trafficking, terrorist and adjacent activities, and other financial crimes as it continues to develop. With these risks already beginning to surface and a precedent already being set due to fraudulent activities on existing platforms, we can likely expect the international regulatory guidelines to implement protective measures and thoroughly analyze any evolving concerns as they make themselves known.

Lay the Foundation for Safety Through Compliance With iComply

At iComply, we’re proud to help financial institutions and companies facing ever-complex compliance guidelines streamline their operations and build a strong foundation of safety. Our modular suite of KYC + KYB software makes it simple for business leaders to stay informed and compliant with the latest AML legislation, and our modular platform can be set up within minutes, alleviating headaches, tedious manual work, and downtime woes.

Learn how you can stay ahead of evolving AML and fraud standards, and discover why iComply is your leading choice for software solutions by talking to our team today.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

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Digital Identities in 2023: Trends and Updates

Digital Identities in 2023: Trends and Updates

by | Apr 3, 2023 | Blog, KYC, News & Events

Digital Identities in 2023: Trends and Updates

With the first months of 2023 already showing uncertainty in both financial and digital markets (re: Silicon Valley Bank and Credit Suisse), business leaders are looking for ways to stay on top of evolving trends and patterns of risks to mitigate the harm caused by money laundering (AML), fraud, and unintentional funding of criminal/terrorist activities (CFT).

As more users adopt digital identities and integrate virtual payment methods, platforms, and practices in their daily lives, global regulators are carefully monitoring trends and actively looking to implement standards that help to circumvent the risks associated with criminal corruption.

Below, we’ll take a closer look at some of the anticipated and notable trends expected in 2023 in the digital universe as online and virtual avenues continue to expand.

Full Speed Ahead

As mentioned above, there are no signs that the creation and usage of digital identities will slow down (quite the opposite, in fact). Digital identity verification has become a pressing issue for regulators as user “personas” become more prevalent in daily matters such as government verification, banking, healthcare, the workforce, and education.

With the identity verification market expected to be worth in excess of US$38.5 Billion by 2033 (source), it should not be a surprise to those in industries adjacent to or directly utilizing ID verification that it is highly likely global regulars and lawmakers will introduce new guidelines that aim to establish a universal understanding and standard of compliance for countries to follow.

The speed with which digital identities are being implemented in innovative ways not only opens the doors for groundbreaking societal and technological advancements but also opens the door to a world of unknown vulnerabilities that place citizens and organizations at risk. Compliance standards and KYC protocols (more on that below), continue to grow in importance as a result, making it essential for businesses and institutions to be ready to pivot as needed.

Did you know: iComply’s unique, modular suite of KYC programs makes it easy to stay compliant with fincrime mandates across the globe and can integrate into your existing frame in minutes?

Data Privacy and Security Concerns

Identity fraud has become one of the most prevalent forms of criminal activity in the digital sphere, causing significant harm to the individuals directly targeted, as well as funding illicit activities with stolen funds and assets. Protection against such crimes is crucial for the privacy and security of your most sensitive client data. In 2023, we expect to see an even more competitive security technologies industry as legislators and manufacturers seek to keep private data safely where it belongs, and out of the hands of nefarious users.

Increased Risk for Fraud

With more users adapting to digital lifestyles at such a rapid pace, inevitable gaps in our current security frameworks could lead to an increased risk for fraud. Ransomware, geo-targeted phishing, and cloud security breaches are expected to increase in 2023, with online banking and electronic transfers being particularly vulnerable. There is also considerable talk—with a growing number of AI advancements entering the spotlight—of concerns that machine learning (ML) could be used to manipulate user likenesses, generate new identity documents that might be harder to debunk upfront and other such issues that come with recent technological advancements. Integrated biometrics and a focus on refining Enhanced Due Diligence (EDD) will be essential to combat these risks.

Digital Asset and Cryptocurrency Exchange Regulation

Cryptocurrency and digital asset exchanges have been under close monitoring over the past several years, and 2023 is poised to implement several watershed regulations to help combat the risks and challenges presented by decentralized banking. In addition to the travel rule, the Markets in Crypto Assets (MiCA) regulation (not anticipated until 2024) puts additional safeguards in place to tie transactions to known persons and give institutions the ability to accurately assess and react to risk in real-time. The Travel Rule and MiCA are most likely the start of a long line of subsequent crypto and digital asset regulations that will continue to evolve—especially as global task forces keep an eye on new issues that come to light over time and as information technology enables new methods to counteract criminal intent proactively.

Stricter Compliance Enforcement

With such prevalent risks arising out of the rapid pace of technological advances and digital user adoption, the time has come for businesses and institutions across the globe to wholly embrace the fact that KYC and AML protocols are far from optional. Failure to comply with existing and future standards carries the threat of hefty fines and can place your client base in significant peril. To avoid the heavy repercussions that come with non-compliance, it is essential to routinely review your processes and protocols and to ensure that you are using the best software available to serve the unique needs of your business.

Stay Ahead of KYC Risks with iComply

At iComply, we know that the costs of non-compliance can be devastating. To help you mitigate risk and stay on top of current legislation, we offer a unique, end-to-end suite of KYC + KYB software that utilizes a modular platform that can be integrated into your workflow seamlessly with minimal downtime.

Learn how you can stay ahead of evolving AML and fraud standards, and discover why iComply is your leading choice for software solutions by talking to our team today!

DISCOVER ICOMPLYKYC

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

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Spotlight On: The Role of AML in Ending Human Trafficking

Spotlight On: The Role of AML in Ending Human Trafficking

by | Feb 22, 2023 | Blog, Fintech Glossary, Human Trafficking, KYC

Spotlight On: The Role of AML in Ending Human Trafficking

Human trafficking and modern slavery remain two of the most challenging humanitarian issues for international legislators and law enforcement agencies to resolve—due in large part to the the level of difficulty to uncover hidden channels and illegal measures that sustain these trafficking networks. According to the Council on Foreign Relations, there are 49.6 million people around the world living in modern slavery. Of this number, 27.6 million people are subjected to forced labour and 22 million were victims of forced marriages.

With the International Labour Organization estimating that human trafficking generates US$150 billion globally, the cost of failing to prevent such atrocities is clear, and compliance with evolving regulations is undeniably essential.

Preventing human exploitation is critical, and strong AML and KYC protocols are essential in achieving this goal. That’s why incorporating appropriate solutions into your current framework is crucial. Strong compliance software can help eliminate ambiguity and reduce the risk of human error, making it an essential tool in preventing serious crimes and protecting vulnerable individuals. By streamlining your business processes and enhancing compliance protocols, you can achieve better outcomes and safeguard your organization’s reputation.

That’s why we’ve developed an award-winning, truly comprehensive KYC + KYB platform that is designed to eliminate ambiguity and the risk of human error. Our solution produces superior outcomes that not only streamline your business but also help protect vulnerable individuals from serious crimes.

In honour of National Human Trafficking Awareness Day in Canada this February, we’ll take a closer look at some of the global realities of human trafficking, as well as the role of AML when it comes to prevention.

Human Trafficking is a Global Epidemic

The harm caused by any and all forms of human trafficking and exploitation is immense and pervasive in today’s society. As of the end of 2022, 49.6 million victims are still suffering from the danger of human trafficking and modern slavery.

One of the most common misconceptions in the Western hemisphere is that human trafficking is a problem relatively isolated to lower-income countries and geographical regions. In truth, human trafficking affects every country, regardless of its political or socioeconomic standing.

Evolving technology and the ease with which money and other digital assets are exchanged have opened new avenues for traffickers to continuously exploit vulnerable people. At present, the Global Crime Index identifies the highest-risk regions for trafficking as Africa, Asia, Eastern Europe, and parts of Central and South America.

Countries outside these areas are far from exempt; traffickers utilize multiple destinations throughout Canada, the United States, France, Australia, and other “Tier 1” countries (as defined by the Trafficking Victims Protection Act) as transportation hubs to move victims unnoticed.

What is Human Trafficking?

Human trafficking refers to the criminal movement of vulnerable people, regardless of age or status, for the purpose of exploitation. There are several distinct areas of criminality that fall under this terminology:

Forced Labour

Forced labour is the exploitation of individuals by forcing them to work for extremely low (often unsustainable living) wages, engage in activities that present significant risks to their health and safety, work under duress or the threat of harm, or labour with no compensation or benefit to the worker whatsoever (therefore, equating to modern slavery). Forced labour victims are often men but frequently include women and children.

As of 2021, the ILO and UNICEF have noted a concerning increase in child labour, rising to an estimated 160 million children, particularly between the ages of 5-11. Children between the ages of 5-17 who are involved in hazardous work (work that is detrimental to their health and/or morals) have also been on the rise, increasing to 79 million victims since 2016. Common avenues for child labour exploitation include agricultural work (predominately farming and livestock herding), factory labour, domestic servitude, militias that use child soldiers, and the commercial sex trade. (Source)

Sexual Exploitation

Sexual slavery makes up a significant portion of human trafficking numbers, with women and children being the predominant victims. Individuals in this category are forced into prostitution rings, sold into international marriages without their consent (e.g. mail-order brides), and forced to engage in sexual acts for money—with the profits primarily or solely benefitting the controlling party.

Medical Exploitation

The Group of International Finance Centre Supervisors (GIFCS) is a long-established group of financial services supervisors that are focused on promoting the adoption of international regulatory standards—especially in the banking, securities, fiduciary, and AML/CFT sectors. The GIFCS represents the interest of its jurisdictional members for various banking matters under the umbrella of funds and securities activities.

Victims of medical exploitation (also referred to as the ‘red market‘) are often subjected to non-consensual experimentation and/or body modification. This includes organ harvesting, forced impregnation, and other forms of human experimentation done with no regard for the lasting harm caused to the involved subjects.

Despite reported decreases in 2020 (largely due to travel complications created by COVID-19), the urgent message of modern slavery remains the same: we must do better when it comes to protecting vulnerable people from human trafficking, and end this threat once and for all.

 

Why AML and KYC Protocols Matter

Human trafficking is a highly lucrative endeavour for criminals, with many of the activities involved in the sale and exploitation of victims being directly involved in money laundering or surrounding crimes.

Anti-money laundering (AML) and Know Your Customer (KYC) legislation sets valuable safeguards in place that, when widely adopted, can make it significantly more challenging for traffickers to operate covertly.

Proper AML and KYC practices can help identify key signifiers of criminal activities such as:

  • the use of “front” or shell companies to launder money
  • suspicious capital funnels from multiple (often unknown) sources
  • the use of alternative payment methods for nefarious purposes such as cryptocurrencies, prepaid credit cards, electronic transfers, and more
  • the concealment of beneficial ownership information
  • unusual financial behaviours (e.g. high-frequency transfers, multiple accounts, etc.), and more.

Global regulatory bodies like the Financial Action Task Force (FATF) and regional decision-makers in the EU and North America work continuously to update and refine current regulations (often collaboratively) to identify prevalent risk factors and address the challenges presented by evolving technology and criminal practices.

Reliable software tools to fight financial crimes linked to human trafficking should involve:

  • enhanced due diligence,
  • transparency into ultimate beneficial ownership structures,
  • adverse media screening and known associations with existing criminal networks,
  • watchlist monitoring,
  • politically-exposed persons (PEP) screening,
  • transaction screening,
  • and more.

Building a Safer Future with iComplyKYC

Though AML and KYC protocols are, as of yet, unable to fully prevent financial crimes linked to human trafficking, they are some of our most valuable first lines of defence.

At iComply, we are proud to take a firm and unrelenting stance when it comes to preventing the atrocities caused by human trafficking. We believe in the importance of safeguarding both individuals and organizations against criminal accessibility. We are proud to offer a modular suite of KYC and AML products that enable businesses around the globe to comply with local and global legislation designed to stop money laundering and the exploitation of tens of millions of vulnerable people.

iComply acknowledges and stands in support of transparency and education where the dangers of human trafficking are concerned. Our team remains committed to pursuing a safer global financial marketplace—through continued innovation and the development of digital tools you can trust when and where it matters most.

Learn more about the dangers of modern slavery and human trafficking and how the finance sector is working to end it here.

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Your Partners in Safety and AML Compliance

Learn more about the benefits of iComply’s award-winning suite of AML and KYC software by booking a demo today.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

What Triggers an AML Investigation?

What Triggers an AML Investigation?

by | Jan 30, 2023 | Blog, KYC

What Triggers an AML Investigation?

Money laundering and financial fraud are two of the biggest risks facing businesses and institutions worldwide, with an estimated USD $800 million to $2 billion laundered annually. To combat this, global legislators such as FinCEN, FINTRAC, and various European governing bodies create and enforce strict anti-money laundering (AML) protocols as well as Know Your Customer (KYC), Customer Due Diligence (CDD), and Enhanced Due Diligence (EDD) processes where necessary.

With the global pandemic having accelerated the already steady shift to more and more transactions being conducted online, the importance of willful compliance and protection continues to grow for organizations worldwide.

At iComply, we know that staying on top of best practices and evolving mandates can be tricky; partnering with a robust AML software provider like iComply is one of the best ways to protect your organization and avoid costly fines. Below, we’ll highlight several key factors that can trigger an AML investigation, and explore how a vetted software platform can keep you safe when it matters most.

What Are AML Investigations?

As the term indicates, AML investigations are investigations pertaining to suspicious financial activities that may be tied to fraud and/or money laundering. Though not every suspicious activity may warrant a full-scale investigation or be indicative of fraud, businesses and institutions must be prepared to uncover, report, and act on further details to stay compliant with jurisdictional legislation.

To that end, every company’s AML protocols should have a clear list of activities and data that warrant further investigation, and an active investigation must move forward should that threshold be met. Common trigger factors include:

  • Sudden, uncharacteristic financial behaviours (i.e. excessive transfers)
  • A client becoming subject to a government investigation
  • Negative SEC reports
  • Whistleblower activities or lawsuits coming to light
  • Transaction monitoring alerts
  • Internal audits

What Happens Next?

Once an alert is raised, your compliance team should step in swiftly to follow up and conduct a more thorough assessment of the right course of action. Not every identified “threat” will warrant a full investigation (which is typically quite costly and time-consuming), but taking a closer look will give your team a better idea of what steps are necessary as you move forward.

Core factors to look at include:

Revisiting Risk Profiles

AML protocols should always have an integrated KYC component—meaning that, should a risk arise, you can revisit your existing customer profile. Take a moment to (re)assess your customer profiles and look for incongruities. Has there been a sudden shift in risk level for the country they operate out of? Any recent shifts in active board members? Is this individual or entity a relatively new addition to your customer base, or a longstanding account with no previous issues? Each factor has a role in determining overall risk and dictating what needs to be done.

What is the Customer’s Baseline?

Every profile will have a different baseline to help determine what is considered ‘normal’ for their operations. Rising interest rates and other economic factors have put a strain on plenty of otherwise normal clients which can lead to brief periods of irregularity in their business operations that, while odd, are explainable given the circumstances. If you recognize significant discrepancies in recent behaviour or prolonged activity changes, this is often a sure sign that something is amiss and safety protocols need to be enacted.

What Happens if There is a Viable Threat?

If your review process makes it clear that your organization needs to escalate the risk factor, filing a Suspicious Activity Report (SAR) may be in order. Once identified, you have 30 days to do so and an additional 90 days to file the final report after an initial investigation has been opened. Failure to comply with this mandate can result in hefty fines for businesses, as well as significant headaches for your operational teams to overcome in the future if not corrected.

To avoid the risk of fines and other non-compliance issues, implement a clearly defined investigation process that incorporates reliable KYC and AML software you can trust, and ensure your compliance and operations teams are adequately trained to be as proactive as possible.

AML Protection With iComplyKYC

At iComply, we know that AML protections are essential to the operation and safety of your business. Our modular suite of KYC, KYB, and AML products not only ensures you have everything you need to manage and maintain a wide range of jurisdictional AML regulations but also streamlines and automates your customer identification and risk screening processes more intuitively than ever before.

Book a demo with our team today to learn more about iComply’s AML solutions and discover how iComplyKYC can be customized to fit the unique risk screening needs of your organization.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.