Anti-money laundering (AML) extends beyond Transaction Monitoring alone.
- Posted by Tom Wijmans
- On 14 July 2020
Financial institutions perform transaction monitoring as an important preventive tool against anti-money laundering practices. A number of major banks in the Netherlands have even established a new organisation to jointly monitor their transactions. This is definitely a welcome decision; this will enable suspicious transactions that take place at multiple banks to be reviewed in their entirety. Patterns can then be detected, which banks would not have spotted in their own transaction monitoring environment.
A lot of attention is obviously being given to this initiative, but anti-money laundering extends beyond transaction monitoring alone.
The process of a stable anti-money laundering environment starts with implementing and maintaining a solid Systematic Integrity Risk Analysis (SIRA). This SIRA enables you to identify integrity risks within your organisation and decide on risk mitigation measures.
These mitigation measures are implemented in the various parts of the anti-money laundering process (but are not strictly limited to the anti-money laundering process). This may lead, for example, to adjustment of the parameters in the transaction-monitoring systems, but also to modification of the policies and procedures.
A major part (and the most laborious part) of the anti-money laundering process is, however, the CDD (Customer Due Diligence) or KYC (Know your Customer). The questions here are who the financial institution actually does business with? What is the source of the wealth? What is the bank account actually used for and does this correspond with what we actually expect? Who is the ultimate owner of the account? Where do the cash flows into this account come from and where do they go to? Based on this, a risk classification is prepared and the review cycles determined.
Subsequently, every transaction is checked to see if anything suspicious takes place in the account. And that completes the circle.
BlueMonks helps organisations to set up these processes. We provide a total solution in order to future proof the organisation and to ensure it can cope with every future legislative amendment and regulation. We ensure there is compliance with the local anti-money laundering rules. Are you interested in an exploratory meeting to see how we could help you?
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