Financial crimes such as money laundering, terrorist financing, corruption, and bribery pose significant threats to financial institutions. Every year, trillions of money are laundered through financial institutions. Regulatory organizations aim to prevent financial crimes by organizing and controlling financial institutions. Institutions need to tackle financial crimes by creating anti-money laundering programs effectively.
Payment Industry At Risk of Money Laundering
One of the industries at risk is the Payment industry. Financial institutions in the payment industry play a key role in combating financial crime. Money transfer companies, e-wallets, prepaid cards, e-money have become famous in the financial sector in recent years. The payment industry enables millions of transactions in one day. Millions of financial transactions pose financial crime threats. Organizations in the payment industry create AML programs to protect themselves from financial crime threats.
One of the reasons that the Payment industry has attracted so much attention in recent years is customer satisfaction. The Payment sector's easy usage and fast transactions have moved the users away from the traditional methods. Unfortunately, it is abusive by criminals that payment services provide easy and fast services. In recent years, criminals have committed crimes such as money laundering and terrorist financing using new payment methods. Therefore, FATF and AML regulators worldwide have imposed AML obligations on organizations in the payment industry.
AML Obligations for the Payment Industry
All organizations under AML obligation must comply with the following obligations. These obligations support the detection and prevention processes of financial crimes.
Payment Service providers must perform Customer Due Diligence when opening a customer account. AML officers receive the necessary customer information and check their accuracy at the opening of the Customer account. The AML officer does not allow account opening if it detects that the customer information is missing or incorrect. The purpose of customer due diligence is to determine the customer's risk level. If the customer risk level is not suitable for the organization, the account will not open because organizations do not want to work with customers who will harm their reputation.
Financial transactions can mediate money laundering and terrorist financing. Therefore, organizations have to control customer transactions. The receiver and the sender should be checked during the financial transaction. The receiver or sender is checked in the required lists. These lists include sanction lists, pep lists, wanted lists, and banned lists. If this receiver or sender is detected in these lists, the AML officer prepares a suspicious activity report related to this transaction. Also, if abnormal customer behaviors are detected, suspicious activity reports are reported to authorized units.
According to AML regulations, all customer-related records must be kept for at least 5 years. Regulatory organizations have the right to access these records at the time of the audit.
Financial institutions are concerned about damaging customer satisfaction while providing AML obligations. In the payment industry, where customer satisfaction is critical, organizations fear that AML controls will delay customer transactions. Sanction Scanner eliminates these problems with AI-driven AML solutions. Sanction Scanner helps organizations in the payment industry to meet all AML obligations automatically. We provide Sanction & PEP screening service with our global comprehensive and real-time data. Perform your AML checks without delaying customer transactions. It's easy to ensure your AML compliance with Sanction Scanner. Learn about AML Compliance Software.