By Antonia Pitta, KYC & AML Team Lead – Admirals CYSEC

Financial fraud is becoming one of the biggest risks to global businesses, and as financial institution’s officers, we are no strangers to this type of irregularities. Financial fraud has many faces. The frequency and scale of money laundering, fraud and other financial regulatory breaches are on the rise, representing a significant challenge for financial services organisations.  

KYC and AMLTF practices play a critical role in the financial industry because they ensure the integrity, transparency, and security of financial transactions. They are designed to protect the wider economy, financial institutions, and the public.

Know Your Customer (KYC) & Anti-Money Laundering and Terrorist financing (AMLTF) officers may be facing fraud ranging from the creation of fraudulent electronic documents to broader financial misconduct. Our primary goal is to prevent various types of fraudulent activities. This includes identity theft, credit card fraud, phishing scams, money laundering and terrorist financing, among others.  

Financial services industry has a lot of fast, big changes to keep up with, depending on world dynamics. Staying compliant with local regulations and adapting to changes in the regulatory landscape is critical, as non-compliance can result in legal and financial penalties, reputational damage, and operational risks.  

Ad hoc assessment of each individual client through various verification tools to ensure document validity, as well as checks for politically exposed individuals, sanctions, along with media reviews, are considered extremely important. 

Ensuring that the funds to be invested or traded within the organisation come from legitimate sources is a critical aspect of regulatory compliance and risk management.  This translates to the implementation of a robust KYC process to gather essential information about the clients.  

Screening is an ongoing process conducted through special tools on predefined time schedule basis depending on each case. Special attention is paid to any indication to terrorist financing and that the individual and its operations are not a part of terrorist money movement for the benefit of organisations involved in terrorism.

To overcome challenges, companies and organizations must stay alert, invest in cutting-edge AMLTF technologies, and tailor their AMLTF compliance programs to meet evolving threats and regulations.  

Simply complying is insufficient to safeguard businesses against the continually evolving and highly complex methods used by financial fraudsters. Additional solutions and support technologies can help businesses identify and prevent fraud, supporting the work of KYC & AMLTF more effectively.  

By implementing strategies and mechanisms that take into consideration evolving technologies, financial services companies can build a stronger foundation for their own growth and success, as well as the industry itself.