{"id":18395,"date":"2021-04-20T06:00:34","date_gmt":"2021-04-20T13:00:34","guid":{"rendered":"https:\/\/www.trulioo.com\/?p=18395"},"modified":"2023-08-01T16:25:05","modified_gmt":"2023-08-01T16:25:05","slug":"bank-aml-kyc-capabilities","status":"publish","type":"post","link":"https:\/\/www.trulioo.com\/blog\/aml\/bank-aml-kyc-capabilities","title":{"rendered":"Record bank fines underscore need for greater AML\/KYC capabilities"},"content":{"rendered":"\n
\"Bank<\/figure>\n\n\n\n

<\/span><\/p>\n\n\n\n

The PYMNTS April 2021 AML\/KYC Tracker<\/a>\u00ae, <\/span>developed in collaboration with Trulioo, notes that even as detection efforts improve, \u201cMoney laundering has grown more prevalent due to some financial institutions\u2019 and payments providers\u2019 subpar Anti-Money Laundering (AML) and Know Your Customer (KYC) programs, many of which have been exposed as ineffective during the past year\u2019s digital banking surge.\u201d <\/span><\/p>\n\n\n\n

Per the new AML\/KYC Tracker, \u201cFines linked to AML compliance broke records in 2020, but experts believe that this year\u2019s totals could be even higher. Oversight agencies in the United States imposed $200 million in fines in just the first two months of 2021, putting the year on pace to top 2020 by a large margin.\u201d Financial organizations also need to start considering the <\/span>Anti-Money Laundering Act<\/span><\/a> (AML Act) of 2020, which builds upon the Bank Secrecy Act of 1970.<\/span><\/p>\n\n\n\n

With zero-tolerance now a post-pandemic reality for banks, knowing where attacks are originating, and who\u2019s being targeted (and why) go a long way toward effective intervention.<\/span><\/p>\n\n\n\n

Seniors are typically easier to take advantage of due to their lack of digital savvy, but a new demographic is emerging as a target post-pandemic.<\/span><\/p>\n\n\n\n

According to the April AML\/KYC Tracker, a recent study found that more bad actors are beginning to exploit the economic anxiety of consumers between the ages of 21 and 30 to turn them into <\/span>unwitting money launderers<\/span><\/a>. \u201cVictims in this age range accounted for more than 40% of so-called money mules in 2020, representing a 5% increase from the previous year.\u201d Perpetrators exploit third-party bank accounts to move ill-gotten financial gains fraudulently.<\/span><\/p>\n\n\n\n

The Financial Action Task Force (FATF) issued a <\/span>warning against trade-based money laundering<\/span><\/a> (TBML), \u201ca large-scale illicit activity that involves criminals using international trade between corporations to conceal ill-gotten funds.\u201d FATF tells banks to notice TBML tip-offs like circular payment arrangements.<\/span><\/p>\n\n\n\n

Over USD $6.8 billion in <\/span>AML compliance violation fines<\/span><\/a> were issued last year, with the U.S. \u201cthe most aggressive issuer of these fines, with a total of approximately $3.2 billion in penalties.\u201d At USD $2 billion in fines, Australia is the next-highest issuer.<\/span><\/p>\n\n\n\n

ID verification tech takes the fight to fraudsters<\/h2>\n\n\n\n

Fortunately, governments and watchdogs are clarifying what compliance means. It\u2019s incumbent on banks and financial institutions to follow through \u2014 or pay. <\/span><\/p>\n\n\n\n

The AML\/KYC Tracker\u00ae notes that the Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration and the Office of the Comptroller of the Currency have \u201cspecified four features necessary to implement an adequate AML system and avoid fines. Compliant systems must include internal compliance controls, independent testing, a dedicated AML compliance monitor and training for all employees involved in AML compliance.\u201d <\/span><\/p>\n\n\n\n

A main weapon in the fight against fraud are biometric solutions, which bypass \u201cfalsifiable fingerprints or selfie scans to more advanced techniques like liveness checks that can catch masks or deep fakes. Hotels are also deploying biometric tools to ensure that customers are vaccinated against COVID-19 and do not risk infecting other guests, for example, giving the technology additional benefits.\u201d <\/span><\/p>\n\n\n\n

\u201cBanks are devoting immense resources to meeting pandemic-induced AML\/KYC challenges,\u201d the new Tracker states, adding that 79% of financial institutions said compliance spend has increased, with 68% invested in solutions and 32% \u201cdevoted to hiring and training AML staff.\u201d <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"The PYMNTS April 2021 AML\/KYC Tracker\u00ae, developed in collaboration with Trulioo, notes that even as…","protected":false},"author":8,"featured_media":18396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[343],"post-types":[172],"post-topics":[193,109,135],"acf":[],"yoast_head":"\nRecord bank fines underscore need for greater AML\/KYC capabilities<\/title>\n<meta name=\"description\" content=\"Money laundering has grown more prevalent due to some banks and payments providers subpar AML and KYC 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