How To Keep Investment Platforms AML-Compliant

The global economy offers a wide range of opportunities for businesses to expand their reach, and promote their brands to new markets. At the same time, however, expanding overseas comes with unique risks. Businesses must stay vigilant against bad actors who might engage with their enterprises under false pretenses, or in hopes of funneling money illegally.

This puts businesses in a precarious position. They face the challenge of offering customers a smooth onboarding process while also remaining rigorous in know your customer (KYC) efforts, taking care to remain compliant with local anti-money laundering (AML) regulations that aim to keep criminals from using legitimate operations to move money illegally. What’s more, companies must also work to remain compliant with the laws in place across the different regions where they operate.

These challenges of ensuring authentication and following ever-shifting AML guidelines present a conundrum for businesses looking to expand globally. How can they rest assured that their trading partners are trustworthy and who they claim to be? In addition, how can they remain confident that they are in compliance with existing AML laws?

The challenges faced by merchants, banks, FinTech firms, retailers and other players looking to expand globally are also creating a market for potential solutions to their KYC and AML needs. To help businesses navigate the often-shifting seas of KYC and AML obligations, PYMNTS, in collaboration with Trulioo, presents the all-new “AML/KYC Tracker™,” a monthly report showcasing the latest solutions, technologies and collaborations that are helping firms to seamlessly authenticate clients and customers, while meeting AML laws in different regions.

Here are some of the latest developments from the AML/KYC space.

News From The AML/KYC Ecosystem 

Companies in several global markets have launched a series of tools to bolster AML and KYC efforts.

In the U.K., for example, financial services firm Pay.UK recently debuted the Mule Insights Tactical Solution (MITS), a new product that tracks fraudulent transactions for bank and credit union accounts, and helps financial institutions (FIs) meet AML and KYC requirements. The solution, which operates on technology provided by Vocalink, collects payment data, analytics and algorithms to detect and highlight suspicious activities.

Other companies are turning to blockchain to follow KYC rules. In France, a group of more than two dozen companies and five banks are testing a new blockchain-based solution known as CordaKYC. Trial participants are able to implement KYC requests within a shared network, with banks able to request data access and business clients able to approve or revoke access, with all data being recorded on the blockchain.

Deep Dive: The Trouble With Existing AML/KYC Rules

Each edition of the Tracker will include a Deep Dive into the current state of the AML/KYC market. The inaugural edition examines how the 2008 financial crisis led to the current state of compliance and regulations, and why many FIs still struggle with standardization.

How FrontFundr Keeps Its Investment Platform Fraud-Free

In the financial services market, trust is an essential component. This is especially true for investment platforms, which link emerging startups with potential investors who are looking to turn a profit. In this arrangement, startups need to feel confident that their investors are who they claim to be, while investors need assurances that they are not handing money over to fraudsters.

In this month’s feature story, Anthony Couture, chief compliance officer of investment platform FrontFundr, discussed how the company offers security to participants without implementing an overly cumbersome onboarding process.

About the AML/KYC Tracker™

The “PYMNTS AML/KYC Tracker™,” a Trulioo collaboration, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.