Money laundering is a global issue that severely affects financial institutions, governments, and society. With regulations becoming stricter and fines for non-compliance increasing, the pressure is on for financial services businesses to implement effective anti-money laundering (AML) screening processes.

Many business owners and decision makers ask, "How can I effectively screen and detect suspicious activities on my platform?" Read on because this article has the answer you need. 

In this article, we will breakdown:

• How the AML screening process works 
• The challenges businesses face when it comes to screening for money laundering activities.
• Businesses that need AML screening
• How you can automate AML screening activities, reduce false positives, eliminate errors, and simplify compliance efforts with Dojah's AML screening solution

Let's dive in.

What is AML Screening, and How Does It Work?

AML screening is the process of analyzing and reviewing customer data, transactions, and other relevant information to identify any potential risks or suspicious activities related to money laundering or terrorist financing. It involves screening individuals, companies, and entities against various watchlists, sanctions lists, and internal databases to ensure compliance with regulatory requirements.

AML screening aims to detect and prevent illegal activities such as money laundering, fraud, corruption, and the financing of terrorism. By identifying high-risk individuals or entities, businesses can mitigate potential risks, protect their reputation, and maintain trust with their customers and regulatory authorities.

Overview of the AML Screening Process

While AML screening processes vary by organization, they typically involve five core steps:

1. Data collection: The first step is gathering customer information via account opening forms, KYC procedures, transaction records, and other sources. Data points generally include full legal names, government IDs, addresses, dates of birth, occupations, business activities, account purposes, transaction volumes, etc.
2. Risk assessment: Collected customer information then undergoes risk analysis based on factors like geographic location, occupation, transaction size/volume, suspicious activities, etc. Higher-risk individuals get flagged for enhanced due diligence.
3. Screening & cross-checking: The heart of AML screening involves cross-checking customer data against high-quality watchlists, sanctions lists, law enforcement records, and negative news sources. Advanced software solutions enable screening against hundreds of lists simultaneously. The lists include global sanction, PEP, and OFAC's Specially Designated Nationals lists.
4. Investigations & due diligence: When screening systems generate an alert, investigations and compliance teams analyze the flagged records and aggregate their findings into reports.
5. Risk-based decisions & reporting: Compliance teams make risk-based decisions about whether to exit customer relationships, place restrictions, or file suspicious activity reports. 

The Importance of AML Screening and Compliance

 AML screening offers several key benefits:

1. Detection of complex money laundering schemes: AML screening employs advanced analytics and machine learning algorithms to detect complex money laundering schemes that may go unnoticed. It can identify patterns, anomalies, and hidden relationships that may indicate illicit activities.
2. Proactive risk mitigation: AML screening enables businesses to take a proactive approach to risk mitigation. By leveraging predictive analytics and real-time monitoring, businesses can identify potential risks in their early stages and prevent financial crimes before they occur.
3. Compliance with evolving regulations: Regulatory requirements surrounding AML are constantly evolving. AML screening solutions ensure businesses stay updated with the latest regulatory changes and adapt their screening processes accordingly. This helps businesses maintain compliance and avoid potential penalties or reputational damage.
4. Protection from reputation risks: Being associated with money laundering or financial crimes can severely impact a business's reputation. AML screening provides businesses with an added layer of protection, helping them maintain a trustworthy image and safeguard their reputation.

Businesses That Need to Perform AML Screening

AML screening is not limited to specific industries or sectors. In fact, various businesses across different sectors have a legal and ethical responsibility to perform AML screening. This includes, but isn't limited to:

• Banks
• Fintechs
• Money services businesses (MSBs) 
• Gaming industry
• Gambling industry
• Cryptocurrency exchanges
• Online marketplaces and e-commerce platforms
• Law firms
• Accounting firms
• Real estate agencies
• Stock traders
• Forex businesses
• Lending services
• and more

Automated AML Compliance With Dojah's AML Screening Solution

Dojah offers an AML screening solution that streamlines compliance by automating AML checks. 

The AML screening API endpoint screens customers against comprehensive watchlists and sanctions lists from global regulatory bodies and organizations. It gives you access to 42,800+ databases across 200+ countries.

The API screens users against the following lists:

• Global sanctions lists
• PEP lists
• OFAC's Specially Designated Nationals list.
• Adverse media across

It efficiently compares the collected data with these lists to identify any matches or potential risks.

How to Access Dojah's AML Screening Solution

You can access the AML screening solution via the following:

API Endpoint

Dojah provides a REST API for integrating the AML screening solution. Read the documentation to learn more about the endpoint. The endpoint receives an individual's first name, last name, middle name (if any), and date of birth and returns JSON data that contains the result of the AML screening checks.

Here's a sample response you get from the endpoint.

The AML Screening No-code Tool

You can perform comprehensive AML checks via the AML screening tool in the "No code Tools" section of the dashboard.

The KYC Widget

You can layer AML screening checks into the KYC widget. This can be done programmatically via the widget's SDK or the EasyOnboard no-code tool.

Secure Your Business With Advanced AML Screening

Get started with the AML Screening solution today to meet your local and global compliance requirements. Say goodbye to manual AML screening processes that are time-consuming and prone to human error. Stay compliant, efficient, and accurate with our comprehensive tool, all while enjoying seamless integration with your preferred workflow.

Scans your customers through 42800+ global sanctions lists and watchlists to evaluate their risk. Contact us for more info, request a demo, or create an account today to get started.

FAQs

Is AML Screening a One-time Process?

No, AML screening is an ongoing process to continually monitor customer data and transactions for changes that could indicate illicit finance risks. Periodic rescreening of customers against updated watchlists and re-evaluating risk scores based on the latest activity is critical.

What Does AML Mean in Banking?

AML stands for anti-money laundering, which refers to laws, regulations, and procedures intended to prevent criminals from disguising illicit funds as legitimate income. Businesses are legally required to implement AML compliance programs to detect, report, and prevent money laundering, terrorist financing, and other financial crimes.

What is an AML Checklist?

An AML compliance checklist is a strategy document outlining required policies, procedures, systems, training, and reporting to satisfy global regulatory expectations.

What is the Difference Between Monitoring and Screening AML?

Transaction monitoring scrutinizes customer activity to identify potential money laundering, while watchlist screening checks names against sanctions, law enforcement, or other high-risk databases. Monitoring evaluates account behavior, transaction details, geographic locations, and cross-border wire transfers for anomalies indicative of financial crime. Screening filters incoming payments, new accounts, and customer records for matches to designated individuals or prohibited countries.