How Does AML Software Work and How Does It Help with Money Laundering?

According to research conducted by the UNODC, a whopping 800 billion to 2 trillion dollars are laundered every year. This makes up around 2 to 5 per cent of the global GDP. Prevention of money laundering activities is a must and there are several anti-money laundering software available that can help with that. AML software uses technology and digital footprints to make sure that financial institutions and legal authorities are complying with the requirements of regulatory bodies.

If you want to know more about how anti-money laundering software works, keep reading!

How Does an Anti-Money Laundering Software Work & How Does It Benefit?

It Screens the Names of Blacklisted Customers

One of the best things about AML software is that it highlights the names of the customers that have been blacklisted by regulatory bodies. Every country has its own regulatory bodies and they maintain a record of such customers. AML software screens for these customers by filtering and maintaining a database of participating countries. The software does not only point out the blacklisted customers but it also notifies the institution ensuring that they get caught immediately. These customers also include PEPs that are Politically Exposed Persons and anyone who receives sudden adverse attention from the media.

It Monitors Transactions

AML software uses historical data to identify peculiarities in specific account profiles. Such software focuses on spotting suspicious patterns in consumer transactions and creates a Suspicious Activity Report (SARs). You can use AML software to track suspicious transactions and highlight the people who made them and their locations.

It Complies with the Day-to-Day Requirements of AML Compliance

The daily application of compliance standards is one of the best features of anti-money laundering software. AML software’s data management features are very helpful and effective in tracking reports filed to financial authorities. This helps institutions remain vigilant and alert against new threats and not get complacent.

It Keeps Up with Cashless Banking

The number of transactions that AML technology systems effectively track has increased significantly. This is a result of the expansion of various electronic payment instruments and the decline in cash payments. The customer experience and services will suffer if financial institutions opt to manually scan this data for monitoring. This is also a very time-consuming process and there is a chance of errors and omissions.

Concluding Remarks

In a nutshell, we can say that anti-money laundering software is a great tool for tracking and preventing financial crimes all across the globe. This software monitors transactions to point out the suspicious ones and flags the blacklisted customers to the authorities so that they cannot get away with any such activity. Moreover, they comply with the daily requirements and adjustments of AML compliance so that the process of tagging money launderers becomes smoother and fast. In the digital world, AML software is a great way to track and prevent financial crimes even for cashless banking systems.