The remittance software products are improving therefore new players and competitors have come into the market. The remittance sector is reaching all new regions. But when it comes to the remittance industry the prime concerns are safety and security. Terrorist financing and money laundering are the major concerns of the remittance industry. Search illegal activities not only lowers the business reputation but also causes them to stay behind others. This is when anti money laundering software comes into existence to prevent such kinds of illegal activities. The software helps predict abnormal activities to prevent suspicious and illegal activities such as financing terrorism.
• Understand your customer requirements for new remittance sectors
The remittance Service providers should regulate the know-your-customer application. With the help of AML KYC software, activities like money laundering and financial crimes can be prevented. Therefore, whenever the remittance service providers deal with a new customer, they should follow KYC procedures to know the customer with whom they are talking. They should follow the KYC procedures efficiently to learn about people and transactions to determine the criminals, and prevent financial risks.
Apart from KYC procedures, remittance systems should also perform customer due diligence as recommended by regulators. With the help of CDD, the remittance service providers ensure that the provided information by the customer is correct, and they can take action if required, according to the risks detected. Therefore, criminal activities can be prevented before they are committed. The politically exposed persons are riskier than others therefore, enhanced due diligence should be used for such customers.
• Sectoral risks
The main thing that results in illegal activities like financial terrorism and money laundering is the anonymity of the sender and the receiver. This anonymity makes it challenging for the service providers to identify the fund source and the recipient which increases the activities like money laundering. Additionally, with the high volume of transactions, the risk factor is also increased which makes it quite challenging to comply with the rules.
This is the main reason why criminals can perform their illicit activities. Therefore, it inessential for service providers to use robust AML measures such as customer due diligence and transaction monitoring processes.
Money remittance providers provide an easy way to transfer funds; therefore, it is more susceptible to financial terrorism and other illicit activities. Such illegal activities are usually conducted across borders making it more difficult to access the customers’ identities.
The service providers’ data present in the money remittance sector should be vigilant about their relationships with the money service businesses as they are associated with high-risk activities that can be done across borders at a high level of corruption. This means proper AML policies and procedures should be implemented, including CDD and KYC procedures that can report suspicious activities.
Also, such providers frequently give proper training to their employees so they can easily understand the significance of AML compliance they can easily identify the red flags and prevent illegal and illicit financial crimes.
