• Layering is separating the proceeds of criminal activity from its source — often through a series of complex transactions through multiple people, corporations and trusts. Illicit cash may be converted to money orders, bonds, wire transfers or even tangible goods like jewelry or art to further disguise the trail. • Integration is the return of the now legitimate-appearing money to the criminal as profit. Now that the proceeds of criminal activity are integrated into the legitimate financial system, the money can be used normally for any number of transactions. At this point, laundering becomes significantly harder to detect and prosecute, as the money appears to be stemming from standard sources of business. Due to its complexity, money laundering presents an incredible challenge for entities involved in the U.S. financial system. Every onboarded customer could potentially be involved in money laundering. Likewise, every new transaction processed could represent the flow of laundered money. Picking out which customers and transactions fall into these categories is like finding the proverbial needle in a haystack. That’s why it’s critical to have an effective AML solution to detect suspicious activity, stop the flow of laundered money and avoid costly regulatory fines — especially as BSA/AML scrutiny grows. Moving Forward with FRAML The fight against fraud and money laundering is never ending, and banks of all sizes can be overwhelmed by the sheer volume of criminal attempts and the complex regulations surrounding FRAML brings together the fraud and AML operations of an institution, helping to automate data sharing and better identify the lifecycle of customer risk that is created through both components. them. Failure to live up to this expectation to protect your customers’ data can lead to regulatory fines and reputational damage that causes further financial harm beyond the costs associated with fraud itself. But criminals are not the only ones evolving. New technologies are replacing outdated methods of monitoring, giving organizations an edge in stopping financial crime before it can cause financial, reputational or legal liability. And implementing a cohesive FRAML strategy is the most efficient and effective way to tackle fraud and AML compliance. Scan the QR code to read our white paper on incorporating the use of both AI and machine learning in your bank’s approach to FRAML. https://www.csiweb.com/what-to-know/ content-hub/whitepapers/fraud-hitskeep-coming/ 25 West Virginia Banker
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