Anti-Money Laundering: Trends to watch out for

EBA (European Banking Authority) reveals that anti-money laundering would be the topmost priority of Europe this year. We, therefore, have compiled a list of the trends to look out for this year. The trends to watch out this year are:

1. More Public Information on the Beneficiaries:

The infamous ‘Panama Paper Leaks’ had the world know about some of the creative and ‘out of the box’ means, which criminals use for committing money laundering. Owing to this, it is much expected that the legislation ‘ultimate beneficial ownership’ will be introduced and implemented immediately. The UK concerned authorities intend to make the businesses register for this legislation by the end of the year. It can also be expected to see updates in the already existing legislation.

2. Revising Regulatory Regimes for enhanced AML security:

The year 2019 had many headlines concerning the money laundering scandals. Take ‘Danske Bank Scandal’ for instance. It reveals the frightening number of suspects that had been operating unchecked from the past many years.

This year, it is expected to find the AML concerned authorities to be rather strict, dominating, and assertive, instead of being forbearing.

Since the UK is committed to being at the forefront, when it comes to fighting the anti-money laundering and in being able to set exemplary measures, it, therefore, intends in introducing its very own AML legislation bill, apart from the EU’s existing regulatory measures.

The US, also, intends on revising its existing financial regulations by the introduction of the latest Fintech regulations.

3. AML KYC compliance for the Crypto-businesses:

With the vast adoption in cryptocurrency worldwide, it is just about the time that such organizations start being compliant with anti-money laundering KYC compliances.

The crypto businesses have possessed numerous anti-money laundering threats over the years and the concerned authorities have been trying to curb it ever since.

Europe’s fifth anti-money laundering directive (AMLD5), has been implemented on the 10th of January of this year. This will oblige the crypto owners in making compliance with the anti-money laundering regulations.

With all that has been said, it is evident how this year involves tough, yet necessary, legislations, and regulations for the crypto businesses. Thereby, they will adhere to such regulations.

4. FinTech insists on automated AML:

For the Fintechs, to implement AML is a matter of survival to some great extent. However, this year many of them would be seen implementing automated anti-money laundering practices. An automated AML is time-efficient, customer-friendly, and more secure.

As opposed to the automated AML, a manual AML comes with the stong risk of the false positive. Subsequently, it has had an adverse effect on the customer onboarding and cash transaction processes. Not only this but, there is also a high chance of missing the actual culprits of money laundering while implementing traditional money laundering.

Considering these vulnerabilities, it makes sense why most FinTechs are not insisting on automated AMLs.

5. AMLD6- The next big thing:

We know that the fifth anti-money laundering directive (AMLD5) was implemented at the start of this year. That said, the EU anti-money laundering concerned authorities already have plans for implementing the sixth anti-money laundering directive or the AMLD6.

This AML legislation, or regulation, will be changing the anti-money laundering practices across Europe. As, after the AMLD6, the member countries of the EU, would have one unified AML and CFT practices. Considering that every EU member country has had its individual AML practice, the AMLD6 is considered a big change.

The member states of the EU are advised on entailing this law by the end of this year. By the mid of the next year, the member countries ought to start practicing the AMLD6. For, the new AMLD entails sufficient updates for overcoming the shortcomings of its predecessors.

AML using Anti-money laundering software:

With all that has been said, it is pertaining to understanding how anti-money laundering is performed after all. An anti-money laundering software acquires data from international sources such as OFAC, EU, HMT, UN, DFAT, and similar. It thereby performs AML screening against individuals and businesses.