New Technologies for AML/CFT
New technologies can improve the speed, quality and efficiency of measures to combat money laundering and terrorist financing. They can help financial institutions and supervisors, assess these risks in ways that are more accurate, timely and comprehensive. When implemented using a responsible and risk-based approach, new technologies and innovative products and services can also improve financial inclusion, bringing more people into the regulated financial system and thereby reinforcing the effectiveness of AML/CFT measures.
This report identifies emerging and available technology-based solutions. The report highlights the necessary conditions, policies and practices that need to be in place to successfully use these technologies to improve the efficiency and effectiveness of AML/CFT. The report also examines the obstacles that could stand in the way of successful implementation of new technology.
New technologies for AML/CFT refer to:
- innovative skills, methods, and processes that are used to achieve goals relating to the effective implementation of AMLCFT requirements or
- innovative ways to use established technology-based processes to comply with AML/CFT obligation
Technology
Technology has the potential to make efforts to combat money laundering and terrorist financing faster,
cheaper, and more efficient.
It can process large volumes of information that go beyond human capability and provide data processing results in record time, releasing human resources for more critical work such as the
analysis of complex ML/TF cases.
Multinational financial institutions, retail and commercial banks and internet-based firms such as Fintech take the lead when it comes to implementing new technologies.
The advantages for the private sector include:
- Better identification, understanding and management of ML/TF risks
- Process and analyse larger sets of data faster and more accurately
- Efficient digital on-boarding
- Greater auditability, accountability and overall good governance
- Reduce costs and maximise human resources to more complex areas of AML/CFT
- Improve the quality of suspicious activity report submissions
Digital Solutions for Customer Due Diligence – can streamline on-boarding processes by adapting to the risk, context and individual.
In particular, mixed approaches, where official ID’s are provided in tandem with biometric identification may offer more robust identification processes.
Digital ID has been widely adopted and supported in many jurisdictions.
The enhanced use of technologies for client screening and matching could also improve efficiency as these tools allow for more accurate and up-to-date collection and processing.
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