Jumio is urging businesses to take a more proactive approach to money laundering. The company noted that while many businesses do not need to implement Anti-Money Laundering (AML) measures under the current regulatory framework, they may need to do so in the future to keep pace with a new wave of AML legislation. For example, the AML 2020 Act in the US extends AML requirements to antiquities dealers and virtual currencies, while Singapore and South Korea have passed legislation that covers digital currencies and other virtual assets.
Other laws could bring similar regulation to real estate and cryptocurrencies as governments try to prevent criminals from filtering money through legitimate businesses. Jumio believes that those businesses should be prepared for that eventuality, especially since many of those businesses have not taken those obligations seriously in the past, and have instead shifted responsibility to financial institutions that are regulated under current AML law.
In that regard, Jumio noted that there can be severe financial penalties for companies that fail to comply with AML legislation. Violators will need to make a substantial investment to update their technology, and the bad publicity associated with a fine can trigger a 5.5 percent drop in an organization’s enterprise value, on top of the cost of the fine itself.
Jumio went on to argue that it is more efficient to invest in a third-party AML solution than it is to build an expensive (and potentially vulnerable) in-house system from scratch. A compliant AML platform needs to offer transaction monitoring and watchlist screening, and should provide administrators with user-friendly case management and reporting tools.
Jumio has previously suggested that businesses will need to win the trust of their customers in order to survive in an increasingly digital economy. The company also published an innovation e-book to help traditional banks keep pace with more modern digital challengers. For those interested, Jumio will discuss AML and transaction monitoring during a webinar on April 29.
April 27, 2021 – by Eric Weiss