What is the connection between fraud and AML?
Unlike theft, which involves taking something of value through force, fraud is when deception is used for financial or personal gain. Fraud is illegal, so any money obtained by fraud is often laundered to conceal its origin, therefore, where there is fraud there’s anti-money laundering.
What anti-fraud measures should be put in place?
The BSA requires all US financial institutions to have anti-fraud and anti-money laundering procedures in place. This includes performing identification and verification checks, screening for Sanctions and PEPs, and keeping records of those checks. Under the BSA, anything suspicious must be reported to The Financial Crimes Enforcement Network (FinCEN); this will include any fraudulent or potentially fraudulent activity.
How can we check for fraud?
To comply with the BSA regulations, you must complete Customer Due Diligence (CDD) on all new clients. If they give false information or attempt to use someone else's identity, the CDD process will expose this. To remain compliant, you must continue to monitor all customers for any status changes so that you can reassess the risk to your business.
How can my business be alerted to fraud?
If a customer gives false information or is attempting to use someone else's identity, the CDD process will identify this. Ongoing monitoring will then alert you if anything happens to make your customer more of a risk - for example, they are sanctioned, declared bankrupt, or have take on a position where they are more vulnerable to bribes. This allows you to reassess the fraud risk they pose in line with the regulations.
What are the best anti-fraud solutions?
SmartSearch is a complete AML, compliance, and anti-fraud solution in one. Not only will it identify and verify your customer, but it will automatically screen for Sanctions and PEPs and trigger enhanced due diligence on any matches and combine this data with Digital Elements (DEs) including telephone number, email address and IP address to deliver an overall risk score.
How can I ensure I am meeting US anti-fraud requirements?
The most reliable and efficient way to ensure you are meeting anti-fraud requirements and complying with the BSA’s AML rules is to use an electronic verification platform. SmartSearch can revolutionize your entire CIP because it enables you to perform full AML checks with sanctions and screening, automatically performs enhanced due diligence on any matches, and continues to monitor all customers on an ongoing basis, alerting you to anything suspicious. The system has robust anti-fraud measures in place, including a highly advanced risk assessment process which combines customer ID data with Digital Elements (DEs), including cell and landline numbers, email addresses and IP addresses - to create an overall fraud risk score, enabling you assess the risk to your business.