Jumio is once again emphasizing the importance of a good Anti-Money Laundering (AML) compliance program for banks and other organizations in the financial industry. The company noted that many organizations have historically cut corners with their AML programs, either because they disagreed with AML regulations at an ideological level, or because they did not think expensive AML programs were worth the significant cost.
However, that approach has become increasingly untenable as regulators have cracked down on money laundering in recent years. Administrators issued $4.27 billion worth of penalties for AML violations in 2018, and that number jumped to $8.14 billion and then $10 billion in the next two years. Such fines also inflict a reputational hit, and financial institutions could lose legitimate customers if they are found to be doing business with unscrupulous individuals.
With that in mind, Jumio went on to lay out all of the four key components of a strong, risk-based AML compliance program. Know Your Customer (KYC) policies require banks to collect and verify the personal information of a new user when they open an account. They must then do Customer Due Diligence (CDD) to make sure that that individual is not on any international sanction lists. After that, they must monitor transactions on an ongoing basis, and report any suspicious activity observed in the course of doing business.
For its part, Jumio pointed out that its portfolio of identity solutions can help financial institutions meet all of those regulatory obligations. The company’s biometric identity verification technology uses facial recognition to compare a new user’s face to the image on their photo ID, and the information on that ID is cross-referenced with various watchlists to evaluate risk. The solution also comes with case management tools that make it easy to review financial activity and file a report with the relevant regulatory body.
Jumio has previously argued that businesses in unregulated industries should take a similarly proactive approach to money laundering prevention. The company strengthened its position in the AML market with its acquisition of Beam Solutions in September of 2020.
June 2, 2021 – by Eric Weiss