The global anti-money laundering (AML) and countering the financing of terrorism (CFT) landscape ultimately raise tremendous stakes for financial institutions. International regulations influenced by standards like The Financial Action Task Force (*FATF) are now implemented in national laws encompassing strong directives like AML 4 and preventive measures like "KYC" (know your customer) for customer identification and it can be shown that institutions occasionally address the effectiveness of their AML monitoring systems. What never really comes out clearly is if they are looking at the right things.
Also we know that poorly defined alert engine parameters and thresholds may raise flags unnecessarily or even miss significant money laundering activities. The Service-Now approach that arose as a consequence of highly knowledgeable end users and dependence on digital platforms compound the management complexity. With the fourth Anti-Money Laundering (AML4) directive released in 2015, with the associated new set of rules to help financial entities protect against the risks of money laundering and financing of terrorism Banks, Telcos and Asset Management firms find themselves burdened by regulation. Among the new requirements exposed entities have to :
- Improve understanding of customers and their financial dealings to minimize risk
- Stricter Customer Due Diligence
- Control customer identity and share data with central administration
- EU member states must implement the directive within two years(This has a direct impact locally)