Learn why an AML case management tool is essential for your business.
Money laundering is a huge global problem. Between $800 billion and $2 trillion is laundered each year, according to the United Nations Office on Drugs and Crime, which amounts to 2-5% of global GDP.
Money laundering has a harmful socio-economic impact, fueling corruption, increasing crime, widening the gap between the rich and the poor, and slowing economic growth. This is why Anti-Money Laundering (AML) regulations—such as KYC compliance—are strict and punishment for non-compliance is severe.
In the past, financial institutions were the primary instrument for laundering illicit funds. Today virtually all businesses—from art to sport—can fall victim to money laundering. Therefore, more industries are now attracting scrutiny from regulators.
Some businesses may not even be aware that they’re being used by criminals for money laundering. However, they may still bear responsibility for it. When the crime is detected, the consequences can be extremely painful. For instance, Danske Bank agreed to pay $2 billion to US authorities for failing to comply with AML regulations—a record fine.
According to the Financial Times, global fines for failing to prevent money laundering and other financial crimes spiked more than 50% in 2022, and the regulations are predicted to keep tightening.
Therefore, all businesses should think about developing a robust AML program with reliable AML investigation and case management capabilities. Let’s discuss this in more detail.
An Anti-Money Laundering (AML) investigation is a multiphase process employed by financial institutions to detect, prevent, and combat activities associated with money laundering, terrorist financing, and other criminal activity. This includes scrutinizing financial transactions, customer behavior, and other relevant data to identify suspicious patterns, inconsistencies, and potential sources of illicit funds.
Anti-money laundering investigations ultimately aim to stop criminal networks involved in money laundering, ensure compliance with AML regulations, and protect the integrity of the financial system.
AML investigations are triggered by various red flags and suspicious activities, which should be outlined in a company’s AML Compliance Program.
The most common red flags and triggers are:
AML (Anti-Money Laundering) case management refers to how investigations into potential money laundering or other financial crime is handled by a financial institution. Case management ensures that each case is thoroughly investigated, documented, and reported in accordance with regulatory requirements. Additionally, it helps to improve AML programs by providing valuable insights and data analysis.
Creating an AML (Anti-Money Laundering) case investigation workflow involves defining a structured process for handling and investigating suspicious activities related to money laundering.
An AML case management workflow usually includes:
To manage the entire process in one place, compliance officers use specialized third-party solutions and compliance platforms.
With Sumsub’s AML Case Management software, you can set up your own verification logic with a flexible Workflow Builder, combining triggers and actions to automate decision-making.
The AML investigation process usually includes the following steps:
Follow these AML case management best practices to prevent money laundering more effectively:
The anti-money laundering investigation process involves detecting, analyzing, and reporting potentially illegal financial activities to prevent money laundering and other crimes, typically following a series of steps including alert generation, customer due diligence, transaction analysis, and reporting.
Money laundering cases are investigated by scrutinizing financial transactions, conducting customer due diligence, checking the source and movement of funds, analyzing suspicious patterns, and cooperating with law enforcement agencies, when necessary.
The duration of an AML investigation can vary significantly depending on the complexity of the case and regulatory requirements, ranging from several weeks to years.
Case management in AML is a structured process of handling and tracking individual cases related to potential money laundering or other financial crimes, ensuring compliance with regulations.
The AML case management process involves a systematic sequence of steps, including alert generation, case validation, customer due diligence, transaction analysis, source of funds checks, documentation, reporting, and ongoing monitoring. This is to respond to potential money laundering activities while ensuring regulatory compliance.
An AML case management solution is a specialized software which helps AML-obliged entities manage, track, document and report the investigation of potential money laundering cases, facilitating compliance with AML regulations.