Updated: Jun 7
Anti Money Laundering or (AML) is a constant topic these days, especially in the FinTech space. Given the comparatively new environment and the multifaceted nature of the FinTech space itself - it's no wonder that it's proving to be a tremendous challenge for regulators and players alike. The article "Meeting the Anti-Money Laundering (AML) Challenge in FinTech" is published in TechFunnel.com, a technology media webpage operated by Bython Media Inc., which provides the latest technology-related news and how these technologies affect businesses, finance and more.
In this article, the issue of how Fintech can balance meeting regulatory AML requirements and ensuring business operability and profitability is discussed.
Firstly, the article highlights the double-edged sword that came with the increasing investments into the Fintech industry in addition to the growth in digital initiatives. One on hand, it has created significant new opportunities for Fintech to expand its businesses and capabilities. However, this has also created a situation in which criminals can utilise these new technologies creatively which would propagate the spread of crime and their ambitions. The result is a spotlight being placed on AML measures where tighter controls and standards are required by authorities.
Next, the article points out some of the major changes in the nature of money laundering and the risks to Fintechs resulting from the improvements in technology. With surges in transaction systems, the limitless flow of funds, anonymised accounts (PayPal), and broad circulation of digital currencies conventional money-laundering has been replaced by the more advanced digital money laundering. This increases the risk exposure to Fintechs due to the higher number of threat vectors that have to be accounted for and addressed during ongoing operations.
A total of 3 recommendations were provided in the article on how Fintechs can improve their stance on AML – Revisiting Know Your Customer (KYC) measures and following the best practices, Leveraging adverse media screening and specialised trust solutions for customer due diligence (CDD) and Automating the transaction monitoring system.
The article notes that these measures can however place stress on the Fintechs business where high compliance requirements can cause a drop in customer experiences and a decrease in customer conversion rates. However, such measures are ultimately a key component in preventing the propagation of money laundering and financial crimes and in the long run.
CYS Global Remit is a major payment institution (MPI) licensed by MAS and as such, many of the items discussed in this article are highly relevant to our operations CYS Global Remit has always placed compliance as a top priority in our transaction monitoring and has mirrored much of the recommendations provided in this article when it comes to KYC, CDD and transaction monitoring.
CYS Global Remit is always on the lookout for newer technologies that can bolster our AML capabilities have also recently adopted OCR technologies in our KYC regime for biometric identification and liveness checks to ensure proper identification of our customers and that
documents submitted are free from fraud.
Discover our advancements in AML capabilities and let us collaborate with you on implementing top-notch safeguarding procedures against money laundering. At CYS Global Remit, we take pride in assisting you in establishing a robust system that shields you from fraudulent activities that generate illegal profits through deceit and dishonesty. Join us in building a secure and trustworthy environment.
Comments Contributed by Jarret Tham, Head of Compliance