Why is AML Compliance Important?
Introduced 2002, AML regulations were put in place as part of the Proceeds of Crime Act (POCA) to fight money laundering in the United Kingdom. Regulated by the Financial Conduct Authority (FCA) and Her Majesty's Revenue and Customs (HMRC) they both share the responsibility in investigating money laundering offenses and ensuring all businesses abide by the POCA Act. Banks and financial institutions must put Anti Money Laundering (AML) controls in place to detect and protect against criminal activities such as money laundering, fraud, and tax evasion. Risk assessment is a crucial step in building an AML program; since every organisation has a different set of AML risks, they must take into consideration their products, services, customers, and geographic location in order to tailor their program with processes, procedures, and technologies to their individual risk profile.
Anti-Money Laundering (AML) and Know Your Customer (KYC)
The Know Your Customer (KYC) aspect became mandatory for all banks and financial institutions in the UK to fulfil Anti Money Laundering (AML) Regulation and Know Your Customer compliance generally falls under an organisation’s Anti Money Laundering (AML) program and overall digital identity verification process. It is intended to prevent businesses and organisations by criminal elements for money laundering. As an essential part of onboarding new financial institution customers, Know Your Customer guidelines involve verifying a customer’s identity and identifying the specific risks associated in doing business with that customer.
You can find out more about what is Identity Verification here.
What do Anti-Money Laundering Checks Consist Of?
AML Checks can be a range of Identity checking methods, which now days is done on a digital scale and will depend on potential risks an organisation may face, how much confidence they may want in their onboarding processes and fulfilling customer due diligence compliance measures.
You can find out more about What is Customer Due Diligence here.
The most common is proof of address (POA) which verifies that a person lives at that address and that address stated actually exists. An Address Verification service will achieve this requirement.
Many financial institutes are now choosing to verify a person’s ID document which adds an extra layer of verification on top of verifying an address. This is when an individual is asked to take a photo and upload their chosen identity document like a drivers licence or passport and upload it into the organisations portal, which is then matched with a selfie taken on their smart phone in the next stage. This identity service known as ID Document Verification usually has a final stage which performs a liveness check asking the individual to perform facial movements to ensure that it’s a real person behind the video and not a static image. An ID Document Verification service will satisfy these requirements all in an easy 1-2-3 process.
The final and most direct fulfilment for Anti-Money Laundering checks is PEP and Sanction screening. This service screens individuals against politically exposed persons lists, sanctions and other international watchlists. Larger organisations that are exposed to risker transactions will be required to have this check in place as part of compliance.
You can find out more about What is a Politically Exposed Person here.
Why Melissa?
When it comes to identity verification, fraud and anti-money laundering executives often face challenges in making the banking experience smooth and seamless for customers. Melissa’s Identity Verification service, is designed to meet stringent international compliance obligations and is easily tailored to specific risk management requirements for fast and secure customer onboarding. The solution includes identity, ID document verification, biometric matching and liveness checks, age authentication, proof of address and global watchlist screening to establish the identity of a consumer - giving organisations the confidence in knowing their customers are who they say they are.
For 40 years, Melissa has offered leading contact data quality, enrichment, and identity verification solutions, helping organisations around the world proactively manage the quality of their data with best-of-breed solutions that clean, verify, update, dedupe and enrich customer contact data.