Anti-Money Laundering Tracking and Blockchain Use

Anti-money laundering (AML) protections have expanded to new areas of software development and technology applications, working to optimize security in terms of both new features and in counter to criminal processes. Blockchain developments such as Bitcoin have been deeply integral in such technology progress and strategic applications, helping individuals and organizations to protect their finances through new programs and protections.

One of the most important pieces of legislation that has been involved with this improved protection capacity has been the Bank Secrecy Act, which remains applicable to the newest AML technology. Programs that use blockchain work to both find and report criminal and seemingly criminal processes which appear to be some risk to the system or network. While the greatest concerns have been terrorist financing and white collar crimes, developmental focuses have been in manipulating the market and securities fraud-type activities. 

AML compliance is a concept that includes a requirement for organizations to implement a minimum level of technology. FINRA Rule 3310 currently maintains established standards for compliance. Fundamental aspects of this include ensuring a reasonable design to facilitate both detection and reporting processes, independent testing to facilitate effective program implementation during integration processes, continuing training that fully addresses the entirety of relevant updates, and customer identification programs which focus on risk and aspects of demands to the organization based on their preferences as consumers. 

As use trends become more complex, including those that have integrated the use of blockchain, effective AML processes must continue to assess all aspects of the processes in order to remain effective. These processes have been optimized to update consumer information as needed, in addition to reporting activity that appears suspicious or potentially criminal. 

Criminal activity has been increasingly concerning as criminal capacities evolve in a reciprocal relationship to improvements in security. The UNODC reported recent laundering at 2-5% of the global GDP, with the upper end of this at $2 trillion. Updated AML programs have continued to integrate criminal trends while addressing new criminal process potentials. These have most recently assisted financial regulator parties in identifying online and mobile network breaching and money laundering processes. The programs have also begun to address compliance assistance aspects, helping financial and other organizations address the legal standards and requirements that have been maintained for operations to be properly following the law.

Best practices in financial institutions have included integrating updated AML software while remaining current with relevant literature and news, and this has included recommendations to participate in compliance programs. Best practice recommendations have also included routine risk assessments of relevant organizational processes and data, assessing risk while recording information that is relevant to organizational strategy evolution. AML software has been increasingly facilitating relevant and integral aspects of this.

Other important aspects of AML software development include potential applicability to general data management, general procedure efficiency optimization, machine learning aspects, and recording customized aspects of transaction types or processes within the defined network. Programs can be set to identify attempted actions of defined users, flag them according to specified setting, and record combinations of actions over time while relating them to potentially suspicious trends. The extent of depth and analysis of historical user information, including types of processes and technology used, has been increasing in AML software. 

Blockchain technologies have increased security a great deal, and AML technologies have been able to further counter criminal progresses in suspicious activity recording. Both financial transaction security and data recording analysis are expected to improve substantially in the near future, although progresses are expected in money laundering as well. While the law has defined certain amounts among transaction types, such as the Bank Secrecy Act defining transactions of over $10,000 to be marked as suspicious or potentially criminal, developments in law may further alter these aspects of business security. The European Union’s Anti-Money Laundering Directive and United Kingdom’s Money Laundering Regulations are also currently among the most generally influential protocol.

Improvements in AML software that may also be helpful in business strategy include data recording and analysis of integral employee training, audit scheduling and data recording, and tracking of the financial reports that are made for regulating agencies. Features have also been optimized to better address potentials for vendors to collaborate with AML officers assigned to maintain AML aspects of organizational function, and these AML officers are tasked with addressing program type and maintenance.

Examples of effective and innovative AML software (and their feature emphases) recently published include FileInvite (case and investigation management, identity verification, and compliance reporting), Clear View KLC (PEP screening and watch list), ProcessGene GRC Software Suite (multi-subsidiary company service, risk control, and compliance assistance), ML Verify (policy management and client portal), Biz4x by 4xLabs (transaction monitoring, risk assessment, and user screening and reporting), SAS Anti-Money Laundering (trend assessment and compliance reporting), NICE Actimize (transaction monitoring and trend reports), AML Manager (behavior profiles and peer group assessments), AMLcheck (use assessments and monitoring), and Token of Trust (verifications and records). 

References

https://www.finra.org/rules-guidance/key-topics/aml
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Phil Tadros - Founder
Philip Tadros is the Founder of Doejo an award winning Innovation Studio with over 30M dollars sold in Innovation, Consulting and Business Development services.