Money laundering and financial crimes pose large risks to financial firms, both from a reputational and regulatory perspective. These criminal activities can manifest in various forms, making it challenging for firms to conduct their due diligence and safeguard both themselves and their investors. As these threats evolve, understanding and combating them becomes increasingly critical.
ACA Group, a provider of governance, risk and compliance solutions, recently delved into common AML schemes.
Cybercrime and money laundering often go hand-in-hand as cybercriminals leverage online platforms to move illicit funds. Utilising virtual currencies like Bitcoin and Ethereum, which are both decentralized and anonymous, cybercriminals can obscure their identities and the origins of their funds. These virtual currencies enable the transfer of illicit funds across accounts or the purchase of goods on the dark web, a marketplace notoriously difficult to police.
Additionally, cybercriminals exploit online banking and payment systems to launder money. Tactics include using prepaid debit cards and virtual credit cards for online purchases, or leveraging payment systems like PayPal for fund transfers. These methods complicate the traceability of illicit funds, posing significant challenges to financial institutions.
A common tactic employed is phishing attacks, where cybercriminals use deceptive emails or texts to deploy malware. Once installed, this malware allows criminals to steal personal and financial information, which can then be used to access and transfer funds covertly, thus laundering stolen money.
Money laundering also involves complex financial structures and professional enablers. Trusts, shell companies, and unwitting or complicit professionals like lawyers and accountants can obscure fund origins. Moreover, cross-border activities add another layer of complexity, often requiring international cooperation for resolution.
Increased scrutiny and regulatory demands are reshaping the landscape of financial crime prevention. Financial institutions are under heightened pressure to enhance their anti-money laundering (AML) frameworks to prevent exploitation. Emerging technologies and the dark web further complicate these efforts, necessitating advanced solutions and continuous vigilance.
ACA Group offers tailored advisory services and solutions to financial services firms to mitigate risks associated with financial crimes. Its tools, including ComplianceAlpha® regulatory technology and Aponix Protect™, empower firms to strengthen their defenses against cyberattacks and ensure robust compliance.
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