Are the conventional methods strong enough to detect the intentions hiding behind the beautiful faces that lead to money laundering and other financial crimes? By looking at the techniques and technology criminals use to commit laundering and other financial crimes, Financial institutions need to implement advanced solutions like Biometric AML regulations.
Seeing the advanced challenges, the Bank of United Arab Emirates, implemented new rules to strictly follow the digital verification of their employees to ensure that company the bank is implementing the latest solution.
As criminals are using sophisticated methods to commit money laundering and other financial crimes, regulatory bodies across the world are also encouraging financial institutions to implement advanced solutions like biometric AML regulations.
Verifying customer identification from face recognition, fingerprint scanning, and Iris recognition to voice matching is reshaping the AML compliance efforts institutes for customer verification.
But there must be something else the financial institutions implement the biometric solution into their AML compliance efforts.
This article will discuss the different areas where the Biometric AML solution would be more beneficial for the organization.
Understanding Biometric AML regulations
Verification of individuals through distinct biological characteristics such as facial reorganization, Iris recognition, voice matching and verification, and fingerprint scanning is widely pronounced as the Biometric AML regulations.
Not more than a decade ago, the use of biometric verification was rarely implemented, and that too in high-profile cases.
But in today’s compliance efforts, the biometric verification of individuals has become a part of verification while onboarding them. Biometric regulations help businesses perform comprehensive CDD, KYC, and identity verification processes in more accurate and quick manners.
The Growing need for biometric Solutions in AML Compliance
Does it seem a big deal if someone steals one’s identity? In this technological advance and AI era, it seems normal.
This is the reason, financial institutions face many challenges while verifying customer identities and preventing fraudulent activities.
Traditional methods where people verify their identity by putting 8 or longer digest passwords or providing PIN code which is no longer secure way in this deepfake era.
This is where biometric technology comes as a savior not only for customers but institutions to mitigate the chances of money laundering and other crimes. Biometric verification has the ability to uniquely identify individuals based on their biological identities such as facial recognition, fingerprint scanning, and voice matching methods. Regulatory bodies such as the Financial Action Task Force (FATF) are also encouraging financial institutions to adopt the technological advance AML compliance solutions.
Why businesses should incorporate Biometric solutions?
Behind every ambition, one thing always remains clear for financial institutions and that is to mitigate the chances of money laundering, terrorist financing, fraud, corruption, and other financial crimes.
However, the following are the reasons financial institutions would like to implement the biometric AML compliance solution.
- Reduce time and resource exudation.
According to one survey the compliance team in any organization, on average, spends more than 70 of their time knowing what is new in regulatory compliance but most of the time these updates are not relevant. But that time could be used for better compliance efforts.
However, with the biometric solution, the system will automatically read the latest updates, incorporate the relevant updates, and implement customer due diligence and transaction monitoring process.
Having the advancedsystem that reduces compliance time, and reduce resource depletion is essential for businesses.
- Reduce the False Positive Rates
One of the biggest problems financial institutions often have to face is the higher rate of false positives. As the business often screens their customers based on their name, address, and date of birth, that could be similar and case in false positive rates.
This not only damages the business reputation but also increasess the chances of losing potential clients due to false flags. Reports suggest the business spent almost 3 billion dollars to cater to the alerts generated by the AML systems. Biometric AML solution can significantly reduce these occurrences by providing a more accurate identification system.
- Implementation of Regulatory Compliance Program
Seeing the latest challenges posed by money launderers, the regulatory bodies including the Financial Action Task Force encourage financial institutions to implement advanced AML compliance solutions like biometric verification of their clients to combat the money laundering activities.
Non-compliance with international regulations can cause businesses face millions of dollars in fines, and reputational damage as well, which could cause you to loose potential clients and revenue.
How financial institutions can implement biometric AML solution
Financial institutions looking to incorporate advanced AML solutions within their compliance process, can begin by choosing the right AML solutions. Like the one AML Watcher provides. They provide accurate, user-friendly, easy to integrate API into the existing system. The solutions also comply not only with local but also international regulations.
