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Banks, insurance companies, asset managers and other companies in the financial sector are required by law to identify and verify their customers and to establish the purpose of the relationship KYC and to monitor their transactions because that may indicate money laundering or terrorist financing AML (Anti Money Laundering).


Let's talk how we can help your business.


Connect to a new world of efficiency by utilizing cleversoft’s business solutions.

Contact Us

Let's talk how we can help your business.


Connect to a new world of efficiency by utilizing cleversoft’s business solutions.

Contact Us

Banks, insurance companies, asset managers and other companies in the financial sector are required by law to identify and verify their customers and to establish the purpose of the relationship KYC and to monitor their transactions because that may indicate money laundering or terrorist financing AML (Anti Money Laundering). In recent years, the number of unusual or suspicious cases to be investigated by Financial Institutions and the time required to do so have increased sharply. This is partly because the pressure on financial institutions from the authorities has been on the increase because of ever more extensive audit regulations. On the other hand, criminal methods are becoming increasingly sophisticated. Here is an overview of the most common fraud schemes and the signs that indicate an individual case review.

Identity theft and the use of false identities

It is common for fraudsters to use stolen identities to pretend to be someone other than they are. The idea behind it: If they can impersonate a customer who is already known to the financial institution, they can bypass some KYC processes for new customers, for example.

It also happens that fraudsters appear under a completely fake identity.  Names, addresses and other personal information do not match a real person.

When to watch out:
Smurfing

“Smurfing” or “structuring” refers to depositing or moving plenty of small amounts of money below the AML threshold. Fraudsters may use several small transactions as a means of evading detection and conducting illicit activities.

To identify this type of fraud, there are several signs to look out for, including:
Layering

Layering is a money laundering technique that involves many complex transactions to disconnect illicit funds from their source. In this process, money travels through many countries, banks, and financial instruments – until its origin can hardly be traced. Indicators of layering can include:

The use of cryptocurrencies

Cryptocurrencies offer anonymity and can be used to transfer funds across borders with minimal regulation, making them attractive to fraudsters.

However, MiCa regulations, which are expected to come into force in 2024, will regulate the exchange of crypto assets for fiat currencies. Accordingly, information about the sender and recipient will have to be requested at all trading venues in the future, regardless of the amount involved.

To identify this type of fraud, there are several signs to look out for, including:
What can companies do?

For the financial industry to be successful in combating money laundering, there needs to be widespread awareness of the problem. Regular training and education of employees on the latest fraud tactics can go a long way.

Another important building block is the widespread implementation of automated solutions such as cleversoft’s KYC/AML suite. As a result, the efficiency and internal audit processes are improved, while the time required is significantly reduced.

If you would like to find out more about our Financial Crime Prevention Services, please visit our website.

Feel free to send us a message via the contact form on our website. We will be happy to answer your questions.