Importance of AML Watchlists In 2024

Miscellaneous


When it comes to protecting your financial system from a number of crimes and risks like money laundering and corruption, AML watchlists come to the rescue. They are like the quiet watchmen who watch over the activities of the criminals and stop them from happening. 

But before we talk about the characteristics of AML watchlists, it is important to understand what Anti-Money Laundering (AML) is to help us get a better idea. AML is all about laws, guidelines, and strategies made to stop criminals from showing money earned in an illegal way as legal.

AML Screening is also known as watchlist screening. This is what forms the basis of AML compliance. It examines people, businesses and transactions against different AML watchlists that are maintained and updated by authorities, FIs, and global organizations.

AML watchlists are huge databases that contain all information about people and businesses that are likely to be part of crimes like money laundering. These watchlists gather data from different sources, including government organizations and FIs, to create a platform for AML Checks.

If you want to know more about AML Compliance, read this complete guide now. 

The course of Watchlist Screening also includes advanced algorithms and technologies that help in examining huge volumes of data, that too in real-time. By using advanced data analytics and recognizing patterns, AML Services are able to identify unusual activities and hail them so they can be examined further.

For financial institutions, performing AML Checks is an important part of their system and not just an obligation. Successful AML Screening eliminates the risk of financial crimes and also protects the reputation of the organization.

According to the IMF, the expense of money laundering around the world is somewhere between 2-5% of the total global GDP, which actually means trillions of dollars being laundered in a year.

Danske Bank’s Involvement in Money Laundering Explained! 

Back in 2016, there was huge difficulty connected with money laundering at Danske Bank, a major bank in Denmark. Authorities figured out that the bank was helping people with moving huge sums of money around illegally. The issue wasn’t just in Denmark. It also included the US, Germany, and Estonia. This shows how serious financial crime can be and why different countries need to work together to stop it.

At Danske Bank’s branch in Estonia, they were moving around billions of euros in unusual transactions. The money came from Russia and different countries that used to be part of the Soviet Union. They had been doing this for a long time, using shell organizations that were making transactions that were very irregular. These sorts of activities made individuals suspect that they were involved in doing something unlawful like money laundering.

The examination that brought this plan to light was set off by suspicious activity reports (SARs) that were filed by workers and whistleblowers. The law enforcement agencies in several other countries also decided to work on this matter to see what was happening. 

But it was definitely not easy to track down these transactions and people.  They had used shell companies and were making transactions from various locations. This made it very difficult to track the people behind this money laundering scheme. In addition to this, analyzing these huge amounts of transactions and noticing the patterns also required more resources and expertise.

The authorities overcame the hurdles and were able to figure out the entire scheme with collaboration. Danske Bank had to face fines and damage to its reputation. People involved in the scheme were also charged with financial crimes.

The Way Forward

Summing it up, AML watchlists are great defenses that stand in front of crimes like money laundering and keep the organizations and their integrity protected. By making use of advanced technology, staying vigilant, and collaborating on an international level, organizations can make the most out of these screening processes. 

As per a report by Grand View Research, the AML market size around the world was around USD 26.44 billion in 2022 and is likely to reach USD 50.08 billion by 2030, developing at a CAGR of 10.6%. The market is consistently growing, so do not stay behind! Visit AML Watcher and implement AML Watchlist Screening now. 

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