AML Finance Program in 2024 


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Top 5 Cases Highlighting Need of AML Finance Program in 2024 

AML Finance Program, at its basic includes the set of procedures and regulations circling around financial institutions in order to reduce the prevalence and exposure to activities inducing the risk of money laundering and corruption extending from financial institutions

These AML compliance programs mainly include programs including Bank Secrecy Act, USA Patriot Act, AML Directives and many more. 

According to estimates, the amount of annual money laundering has soared up to $800 billion, which makes 5% of the total GDP (Gross Domestic Product). The large sum of money that never enters the global financial system is a major challenge for both developing and developed countries. 

Considering the amount of monetary reserves that are being lost to corruption, money laundering and associated challenges, banks, fintech companies and other financial institutions are being uniquely regulated, as part of assisting the government to deal with the emerging challenges and cases of money laundering involving financial institutions connecting us to the purpose of AML financial program. 

What is the purpose of the AML Finance Program? 

There are many AML red flags that demand consistent ongoing monitoring. To make that happen, anti money laundering compliance programs make sure that no financial institution remains at the forefront of being subject to fraud, money laundering and corruption related crimes. 

The core purpose of the Anti Money Laundering finance program is to empower the financial institutions to screen and detect suspicious activity that may result in legal, reputational and monetary repercussions to the economic cycle and financial institutions. 

However, one thing should remain evident that the sole purpose of the AML compliance program doesn’t stop with providing regulations for financial institutions; rather a comprehensive guide about implementation must also be there to ensure global compliance and safe business operations. 

Why is it mandatory to comply with the AML financial program in 2024? How can financial institutions decide the areas of focus? Read the complete blog ahead that discusses top 5 cases highlighting the need of AML compliance program and insights depicting which areas must be prioritized among financial institutions.

Top 5 Case Studies of Banks To Learn From! 

There have been several cases that gained momentum due to their inability to abide by the AML financial program and facilitated the way towards money laundering, resulting in serious repercussions and regulatory fines. Here are the top cases to learn from!

  1. The Hongkong and Shanghai Banking Corporation (HSBC), being one of the largest banks in the world, fails to comply with jurisdiction boundaries as mandated by AML regulations in the targeted region. The bank was fined $1.9 billion by US authorities in response to their failure to identify drug cartels as risky and proceeding to continue trade 

partnership with countries under US sanctions. This primarily included Iran. 

The loopholes from this case primarily include lack of access to database, screening and due diligence.

  1. Deutsche Bank, a renowned German bank has gained limelight for being involved in AML related scandals. The bank was fined due to their lack of due diligence and inefficient audit reports that allowed $10 billion of suspicious funds to flow out of Russia. 

The loopholes from this case primarily include inadequate controls and inability to monitor transactions. 

  1. Standard Chartered, after acknowledging their failure to implement AML solutions, agreed to pay $667 million fines to regulatory authorities. This bank was accused of facilitating transactions to and from Iran, which is a major highlight in US sanctions, thus depicting non compliance with jurisdictional anti- money laundering regulations.

The loopholes from this case primarily include lack of access to database, screening and due diligence.

  1. Danske Bank a famous Danish bank was involved in money laundering which costed the bank around $230 billion in suspicious transactions that flowed through their Estonian branch. 

The loopholes from this case primarily include inadequate money laundering controls and   screening and due diligence.

  1. ING Group, a famous Dutch bank was fined with $900 million for failing to prevent money laundering and corruption related practices. 

The loopholes from this case primarily include inadequate AML controls to stop the flow of corrupt practice and inability to report suspicious transactions. 

How to Empower AML Program for your Business?

Having significant understanding of case studies that depict the amount of financial and legal loss in response to negligent AML screening services, here are the ways to improve AML screening compliance. 

  1. Proactive Risk Assessment
  2. Strong Internal Controls 
  3. Ongoing Monitoring 
  4. Regular Audit & Reporting

What’s the Way Forward? 

AML Compliance Program is undeniable. Especially in times when crime rate is surging and prevalence of digital crimes is becoming more than ever, AML finance program is necessary in 2024. The way forward in protecting the business integrity in 2024, is dependent on combination of strategic planning, technology integration and ongoing collaboration among internal controls and and regulated compliance guidelines. 

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Sumana Das

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