What is anti-money laundering?
AML refers to the measures used by financial institutions and governments to prevent and combat financial crimes. These measures include money laundering, drug financing, human trafficking financing, and terrorist financing. A financial institution’s AML policy is part of its broader AML compliance program, while remaining compliant with local AML regulations.
What Every LAB Program Should Include
A typical LAB program includes the following elements:
Know Your Customer (KYC) . Many banks confuse KYC details korean numbers phone with anti-money laundering, often resulting in weak compliance policies and regulatory fines. KYC is the process of verifying a customer’s identity. Before a customer can use banking features, they must provide a valid ID.
Risk Assessment. Risk assessment helps to fully understand a customer and the potential risk associated with doing business. Banks can determine whether a customer is low risk or high risk by using a scoring model. This scoring model should consider several risk factors, such as geographic location and the results of the KYC due diligence process, before proceeding with approval.
Training of AML compliance personnel. More education leads to less ignorance and fewer errors, especially in teaching the legislation. An effective AML training program should take into consideration the risk profile of the company and the type of services it offers. Staff training should also include in-depth training on financial and legal frameworks and regulatory requirements.
Internal Controls and Independent Audits. Internal controls are policies created to mitigate money laundering risks. They also help maintain compliance with anti-money laundering regulations. Banks are required by law to have controls in place for sharing information within the company for anti-money laundering purposes.
