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Failures in implementing AML Transaction Monitoring increasingly have real world consequences, as the US government continues to crack down on money laundering. A lack of tolerance for low quality AML measures is seeing more and more cases of prosecution under the Bank Secrecy Act. One of the most recent involves two co-defendants named in an indictment from March 2021 who, in September this year, pleaded guilty to "failing to maintain an effective anti-money laundering program." As a result of the failure, the two defendants, Hanan Ofer and Gyanendra Asre, are named in charges involving $1 billion in "high risk" transfers. The pair are accused of having run an unlicensed money transmitter business, targeting investors less sophisticated than they were offering to operate High Risk Business Lines on their behalf. The big issue is that both the defendants had the knowledge and experience to operate those business lines - and provide the necessary AML Transaction Monitoring and oversight for them.

It's not just in the financial sector where the tightening of anti-money laundering measures is becoming vital. The lucrative UK art market is another industry where there is the potential for this type of financial crime to go uncontrolled without the right restrictions in place. That's why the British Art Market Federation has issued guidance on anti-money laundering for those who are part of the art market in the UK. The advice has been approved by the UK tax authority and is intended to provide a way forward that is compliant with the EU's Fifth Anti Money Laundering Directive. The guidance provided by the federation is not mandatory for businesses operating in the art market. However, those that choose not to comply may need to provide a reason for doing so.

It wasn't that long ago that Fintech companies were considered relatively new to the financial services market. However, in recent years they have proliferated in numbers and become much more broadly accepted. Today, banks and FinTechs are very much part of the same industry and that has meant a significant increase in scrutiny and requirements for compliance where FinTechs are concerned. While that may sound fairly simple in principle, it's worth remembering that banks have been subject to regulation and scrutiny for decades while for the fintech, AML Compliance is a relatively new thing. For those without a depth of institutional knowledge, or where there aren't the human resources to use to focus on compliance, that can be incredibly challenging.

Recent events have made it even more important for organisations and regulators to get better at spotting, and stopping, financial crime. The global pandemic, followed by the cost-of-living-crisis in the UK, opened the door to a whole wave of financial crime where criminals seek to exploit individual vulnerabilities and organisational weaknesses. That's why the UK regulator - the Financial Crime Authority - has made fighting financial crime a key priority - and where technology like Anti-Money Laundering Software can make all the difference.

Innovation is a vital component in AML Prevention, especially as the tools and systems that are used by criminals get increasingly sophisticated and complex. However, many firms today feel that innovation is tricky in this area, especially with an increasing burden of regulation. These are the firms that are likely to remain committed to legacy technology and systems that leave them open to exploitation. For example, relying on a manually delivered financial crime risk management and AML Prevention regime can mean that it's challenging to identify the indicators of crime, as well as to collect vital data quickly and mitigate losses. The reality is that innovation is essential for AML Prevention - but it doesn't have to be as expensive and time consuming as it sometimes seems.

Although anti-money laundering measures have been significantly improved for UK and European Banks there are still many issues, according to the regulator. One of the biggest of these is the failure to collect Know Your Customer (KYC) data, such as income and information about occupation. This lack of up-front due diligence is creating shaky foundations in the ongoing battle against money laundering and challenges in transaction monitoring. Also problematic is the fact that many UK and European banks still opt to manage these processes manually, instead of investing in the tech that could make KYC and transaction monitoring more efficient and compliant.

The most recent report into Anti-Money Laundering Solutions has revealed that the annual cost of compliance is continuing to increase. In fact, the research by LexisNexis shows a more than 13% rise in the expense of compliance for financial institutions across the United States and Canada. The research is done by polling professionals to identify what is changing in the world of financial crime. The rise in spending is a trend that is noticeable across banks and FinTechs who are spending more today on Anti-Money Laundering Solutions than before the pandemic. The total cost for banks and FinTechs in this part of the world is approximately $56.7 billion.

Europol has taken a big step towards greater anti-money laundering control with the arrest of one of the biggest money laundering threats in the European region. The arrest was announced back in September when the subject was picked up in Malaga, Spain.

Anti-Money Laundering Compliance measures are being accelerated on a global level, including across North America. In the Fall this year, FINRA (Wall Street's self-regulator) announced that - for the first time - it was issuing guidance relating to member broker-dealers with respect to the potential penalties that could be exercised where firms are guilty of Anti-Money Laundering Compliance failures. Although it hasn't been confirmed by FINRA, it's thought that these new guidelines could be the first sign that the regulator is intending to intensify its anti-money laundering efforts - and expects member firms to do the same.

The Netherlands has been identified as at serious risk when it comes to money laundering practices in the country. Given that roughly 16 billion Euros is laundered here on an annual basis there is a clear need for improved AML Compliance in the Netherlands.