What Is AML And The Growing Problem Of Money Laundering

What Is AML And The Growing Problem Of Money Laundering

Financial crime is a significant social threat and a constant concern for financial institutions and money service businesses. Two of the most prominent financial crimes are ‘Money Laundering’ and ‘Terrorist Financing.’ Banks face millions of Pounds in penalties due to any lapse in implementing Anti-Money Laundering or Counter Financing of Terrorism (AML/CFT) measures on their end.

What is Money Laundering and Terrorist Financing?

Wikipedia defines money laundering as “the process of concealing the origin of money, often obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions with varying definitions.”

According to the International Convention for the Suppression of the Financing of Terrorism, a person commits the crime of financing terrorism “if that person by any means, directly or indirectly, unlawfully and willfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out” an offence within the scope of the Convention.

How is Money Laundering Different from Terrorist Financing?

A significant difference between Money Laundering and Terrorist Financing is as follows:

Money Laundering involves money originating from illicit sources, and the process involves concealing the origin of money.

Where-in terrorist financing sources might always not be illicit, and people may contribute from their legitimate incomes towards such evil causes. However, the efforts are directed toward concealing such sources of contributions that fund terrorist activities worldwide.

Social Impact of Money Laundering

People think money laundering is a victimless crime; however, it is far from it. Money laundering significantly impacts our society in the following ways:

  1. Increase criminal activities
  2. Corruption
  3. Negative impact on legitimate businesses
  4. Weakening of financial institutions
  5. Economic distortions and instability
  6. Loss of tax revenue for governments
  7. Risk of loss of reputation for financial institutions
  8. Terrorist financing

Regulators take dereliction on behalf of Financial Institutions in implementing AML/CFT Processes very seriously. Hence financial institutions are required by law to have robust AML policy and procedure implementation. And this has opened up significant employment opportunities in the financial sector for job seekers.

What does a role in AML look like?

An anti-money laundering analyst is a professional who investigates and monitors financial, customer activity, and transactions and identify any activity that is deemed suspicious. They are also responsible for helping businesses comply with all anti-money laundering rules and regulations to prevent their companies from being used directly or indirectly for money laundering or funding of terrorism.

A KYC (Know Your Customer) Analyst primarily reviews documentation for new customers or existing accounts, evaluates high-risk accounts where applicable, and analyses new customer processes and policies. They also study market trends and observe customer behavior patterns within the business in which they are employed.

Once you have been in the role for several years and gained experience, you may be thinking where do I go from here. A role in AML/KYC can be considered an entry role for so many other opportunities within regulated industries. Here are some other positions you can enter into:

  • A Risk or Compliance Assistant,
  • Compliance Monitoring Administrator,
  • Client on-boarding Manager,
  • Credit Risk Officer
  • Governance teams

As you can see there is no end to the opportunity for you to either expand on your role or move into another one.

How can you become a financial crime fighter and make a successful career?

KYC Lookup offers courses that extensively cover this subject. Our curriculum covers topics that will help you acquire relevant skill sets to be employed in the financial sector.

According to the website www.salaryexplorer.com A person working as an AML Analyst in the United Kingdom typically earns around 111,000 GBP per year. Salaries range from 51,100 GBP (lowest) to 177,000 GBP (highest). And this range is bound to move northwards, given the complexities presented by the rise in virtual currencies worldwide.

For anyone operating within a regulated industry, having the right experienced AML employee will help you ensure that you operate within the regulated framework and continue to safeguard yourself from being exposed to money laundering and terrorist financing.

To know more about us and how we can help you forge a career in this dynamic field, please visit our website www.kyclookup.com.

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