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A Practical Reality: Anti-Money Laundering Measures in Financial Services

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Politics in the US is about more – much more – than who will be the next president. Among the many arguments and negotiations, the world of financial regulation often seems to hide in the shadows. But it’s vitally important. A recent debate, highlighted by the Cato Institute*, focuses on the U.S. Treasury Department’s proposal to expand anti-money laundering (AML) authority over cryptocurrency. This initiative underscores the ongoing challenges of adapting traditional regulatory frameworks to emerging technologies.

See the wood, as well as the trees

That’s an important discussion, whatever your viewpoint. But for most financial service businesses, seemingly more mundane matters take priority. The imperative remains clear: implementing robust AML, Counter Terrorism Funding (CTF), and Politically Exposed Persons (PEP) checks is crucial. These measures are not merely regulatory formalities; they serve four key purposes:

  1. Legal Compliance: The law mandates these businesses to ensure the funds they manage or handle are not entangled in criminal activities.
  2. Thwarting Criminal Prosperity: By making it harder for illicit funds to circulate, these measures directly impede criminal enterprises.
  3. Demonstrating Compliance: Rigorous adherence to AML regulations helps businesses avoid punitive fines and protect their reputations.
  4. Protecting the Business: Beyond compliance, these measures shield businesses from being unwittingly implicated in financial crimes or losing money on their own account.

Full compliance requires a holistic approach

The cornerstone of effective AML strategies is a system capable of constant transaction monitoring, alerting businesses and authorities to any anomalous activities. However, not all systems are created equal. Many lack full automation, are not fully customizable for specific business needs, or remain constrained by data-sharing issues due to “silo” mentalities.

In this context, Compli from Essiell Compli stands out as one of the few powerful alternatives. Utilizing a “global person” concept, Compli creates comprehensive profiles by integrating multiple databases. Its “always-on” monitoring is enhanced by information sharing between collaborating organizations, breaking free from the limitations of data silos. Compli is fully customizable for each unique business structure and remains intuitive to operate for its users.

Of course, looking at compliance and the provision required to meet regulatory obligations has to be more than tick list of features. The needs and challenges of frustrating financial crime have to be dealt with in the round. Criminals – whether drug cartels, counterfeiters, terrorists or fraudsters –  are increasingly sophisticated in their use of technology, so the real counter-measures lie in tech solutions too, as well as on-the-ground law enforcement. In this demanding context, appropriate software must be determinedly thorough and function in a genuinely holistic way.

Don’t ignore the day job

As high-level political debates continue, the practical reality for businesses in the financial sector is clear. They must not only demonstrate compliance, but also actively protect themselves from corruption and financial crime. Only with robust AML systems like Compli in place can businesses confidently navigate the complexities of financial regulation, ensuring their integrity and security in a rapidly evolving financial landscape.


*At Least They Asked This Time… the Cato Institute, November 28 2023

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