As technology continues to advance at a rapid pace in the United States, so does the ever-looming threat of money laundering. Criminals continue to find new and more creative ways to launder dirty money and bypass the anti-money laundering systems that different institutions have in place.
Now more than ever, it has become imperative that US-based companies adhere strictly to AML compliance, else they run the risk of being unwittingly utilized in illegal operations.
After all, no business is too big or small to be targeted by criminals looking to take advantage of weaker AML controls. The movement towards online transactions introduces more and more opportunities for cybercriminals to take advantage of, especially in financial hubs like New York.
Here are a few reasons why AML is so important in 2021.
The Continuous Evolution Of Money Laundering Methods:
Whether it’s terrorists, cyber-criminals, or e-commerce culprits, money launderers continue to find new ways to beat the most sophisticated AML defense systems while AML authorities need to remain vigilant around the clock in order to detect these new criminal methods and find ways to help arm businesses against them.
Instances of money laundering have seen a significant increase in recent years and will likely continue to rise in the years to come. It has become so serious, in fact, that reports suggest money laundering transactions account for up to 5% of the world’s Gross Domestic Product per annum. That being said, the importance of enforcing strict money laundering regulations moving forward cannot be overstated.
Your Company’s Reputation Is Always At Risk:
Certain companies such as financial institutions bank heavily on their reputation to drive the success of their business. Making their brand synonymous with safety and strong money laundering regulations can significantly increase the likelihood of customers wanting to deal with them and trust them with their hard-earned money.
The reverse is also true, as being known for lax AML systems or past laundering scandals can prove to have devastating results on a customer’s willingness to want anything to do with an organization. Businesses that have been investigated or fined in the past on account of money laundering will more than likely see their customer’s trust plummet and being linked to laundering schemes can also turn into a media frenzy which could be a disaster.
Poorly Implemented AML Compliance Systems Can Impact The Customer Experience:
In an age that promotes speed and convenience through online shopping and internet-based transactions, having an AML compliance process that isn’t streamlined and efficiently implemented can seriously bog down response times and severely sour a customer’s experience.
Since the AML compliance process often requires multiple interactions with the same client, proper onboarding of customers is key and so is an overall well-structured process.
Heavy Fines Can Sink A Company:
In keeping up with how serious the threat of money laundering is, AML fines and penalties have continued to see a staggering increase in recent history. Between 2018 and 2019 alone, the AML penalties doled out by authorities have almost doubled.
Being sanctioned by the regulatory bodies due to involvement in money laundering operations, even if inadvertent, can do enough financial damage to drive a company out of business.