About Money Laundering
Indiaforensic > Education > Money
This is the time when the many of the banks in India
have implemented the Anti-Money Laundering solutions, many software
companies have come up with their own products and some of the
software companies have also acquired the companies in the domain of
Anti Money Laundering.
The first thing that the bank needs to know while scanning through
the AML vendors is the experience of implantation in the Indian
Banking industry. Generally the bank which is implementing the
software looks for those vendors who have implemented the solutions
for their peers.
which aspect to deal
This has to be the first step for any risk-based AML solution
implementation approach. Depending on the risk which you feel is
most important, you will narrow down the search for possible
vendors. Generally there are four types of features available –
Behavior pattern analysis, KYC Reporting, Transaction analysis and
client risk assessment if the banks don’t have interest in knowing
the suspicious transactions and is only interested in KYC norms
the bank should look for the vendors who have strong reporting
system inbuilt in their software.
Do your due
diligence on the service provider.
Research who is behind the company and what his/her expertise in
the field of banking and compliance is. Remember, you are relying
on his/her expertise.This is the time when many of the Indian
banking players have implemented the AML solutions for various
purposes and some of the vendors are also from India,hence it
becomes easier to get the information regarding the service
providers and due diligence is a comparatively easier job.
Find out too
good to be true statements
In 2002, the Associated Press stated that a vendor had "15 of the
nineteen terrorist hijackers in its database prior to September
11". As we all know, statements that sound too good to be true
usually are. Another vendor states in its material that its search
combines information from over 400 million files/records. Are
there really these many records related to frauds even on Google
which searches almost all of the websites that are technically
sound. One needs to identify the statements in the marketing
material which are too good to be true.
Be as specific
Imagine RBI asking the data from your bank regarding the KYC
solution and you answering we monitor several terrorists and
Politically Exposed persons.It is very essential to know the
specific statistics about the data that you are paying for. You
need to know exactly what kinds of information is included in your
product. At least, request a list of the databases for your own
records.The type of source - governmental sources, newspaper
articles, or privately maintained newsgroups - determines the
quality of the database, that's why you need to know.
prepared list of names
In addition to this when banks get many proposals from the AML
vendors, first thing that you can do to validate their claims is
to prepare your own list of app. 50 known terrorists, money
launderers, fraudsters and use it as a sample to test the
products. If these names are found in the list of the AML solution
then it passess the first stage.The softwares can be ranked based
on the % of entries appearing in the databases of the AML vendor.
This allows you to quickly identify strengths and weaknesses in
the vendor's product.