Financial institutions always face the risk of money laundering, terrorism financing and human trafficking. For this reason, FATF and other regulatory bodies have introduced AML/CFT protocols to deter fraud effectively.
This way, companies can easily avoid hefty fines and permanent bans and maintain market credibility. Moreover, with the help of a KYT solution provider firms can easily identify suspicious activities.
The following section looks closely at the significance of KYT services. Moreover, the headings discuss how financial institutions can use an innovative approach to discourage crimes.
Transaction Monitoring Services: Gaining Quick Insight
According to Markets & Markets, by 2023, the transaction monitoring system will reach around 16.8 billion dollars, showing a CAGR of 15.1% from 2018 to 2023. A major growth driver of the industry is the execution of advanced analytics to offer instant alerts. Moreover, SMEs and cloud deployment modes will grow massively during the forecast period mentioned above.
A transaction monitoring system is an ongoing observation of customers’ financial exchanges according to international guidelines. The cutting-edge service analyses users’ historical information and account profiles. This way, financial firms can easily deter money laundering and terrorism financing cases by calculating risk associated with customers’ profiles.
Teaming up with a KYT solution provider can help firms implement an AI-driven solution that sends alerts in case of violation of rules. Once the authorities receive a notification, the whole transaction monitoring process stops. This way, the risk department can review the whole process and report to global authorities. AML/CFT legislators receive the final Suspicious Activity Report (SAR) in case clients do fraudulent exchanges. The following exchanges come under the AML monitoring procedure:
- Currency exchange
- Financial withdrawal/ deposits
- EFT payment exchanges
- Letter of Credit (LC) transactions
- Trade-related exchanges
Best 5 Rationales to Cooperate with a KYT Solution Provider
An AI-driven transaction monitoring procedure is about verification of customers’ monetary exchanges to evaluate risks and prevent fraud. This way, companies can easily strengthen business relationships. KYT protocols ensure that professionals have accurate data regarding users’ exchanges to prevent money laundering.
- Expanding Channels of Financial Transactions
Technological advancement has played a critical role in the growth of the transaction monitoring industry. Electronic payment instruments have more interest as compared to cash-based payments because of less time consumption and faster services. This has successfully broadened the scope of AML systems. Moreover, it requires support from a KYT solution provider to monitor online monetary exchanges. Hence, the significance of AML compliance programs becomes more obvious than ever.
- Facilitating Compliance with the Latest Regulations
Financial firms worldwide face the risk of money laundering and terrorism financing cases. For this reason, global regulatory bodies have introduced several laws and regulations. Every jurisdiction also has specific AML/CFT laws given by the local government. For instance, currently, there are around 9 plans in the US congress regarding anti-money laundering.
The latest regulations demand financial companies to upgrade compliance procedures daily. Within this context, compliance officers play a vital role in calculating users’ risk profiles in light of new laws.
- Detecting Financial Fraud
Electronic financial exchanges and an increase in online platforms have enabled fraudsters to commit money laundering cases. AML regulations & transaction monitoring systems play an essential role in identifying and discouraging criminal activity.
- Avoiding Hefty Fines & Permanent Bans
Financial firms must be familiar with the most effective methods to gather information. For this reason, AML tracking systems must be clear and precise for corporations. At this point, experts can easily manage their workload with AML compliance officers. This enables professionals to create analytics and save time.
When companies follow regulations and collaborate with a KYT solution provider, it becomes easier to avoid fines and maintain their reputation.
The state-of-the-art solution is a GDPR & PCI DSS-compliant service that secures a strategic advantage in a challenging market environment. With innovative technology and a KYT solution provider, businesses can easily achieve corporate milestones.
- Saving Time & Resources
Companies that do not follow the latest KYC & AML regulations face severe consequences. There are numerous money laundering scandals and non-compliant organisations face heavy financial penalties. For instance, in 2018, financial regulatory bodies fined non-compliant enterprises around 2.9 billion dollars. In 2019, the figure doubled. Hence, modern-day firms have become familiar with the significance of implementing AML transaction monitoring procedures through a KYT solution provider.
The Bottom Line
Modern-day firms must work with a KYT solution provider to identify & discourage suspicious transaction activities for fraud prevention. Cutting-edge systems can help financial companies to prevent money laundering and terrorism financing cases. This way, experts can easily get familiar with red flags and calculate risk associated with monetary transactions. Business experts do not even require constant tech support with AI-driven KYT systems. The advanced approach can help financial institutions maintain market credibility and strengthen relationships with business partners.