Friday, August 12, 2016

Anti-Money Laundering Software to Help Banks Prevent Illicit Transfers


A pair of entrepreneurs has developed a solution to help banks reduce the risks involved in remittances. Route Trading Ltd., launched by Musa Jammeh and Taimoor Iqbal, will introduce Money Router, a software solution, to London, U.K. banks to prevent illicit money transfers.

Money Router, to be introduced in September, is designed to improve the safety of global payments, enabling financial institutions to set parameters in accordance with anti-money laundering and anti-terrorism financing regulations.

Developed in London by a team led by a compliance officer employed at a major U.K. bank, and a tech entrepreneur with a background in money transfer, Money Router is designed for both banks and money service businesses (MSBs).

The banks need to monitor the money coming into their accounts from the MSBs customers. By integrating the bank accounts with the money transfer system, banks can manage the end-to-end anti-money laundering (AML) compliance of the money transfer transactions in one place. They can achieve this by using regularly updated and compressive AML databases and regulatory registers such as the FCA Payment Services and HMRC Money Services Business registers.

Overseas workers often transfer part of their earnings to families abroad. As migration has increased worldwide, the total value of these "home remittances" to emerging economies has doubled that of direct foreign aid. But since much of the sector is unregulated, it has been linked to money laundering and terrorism.

Banks Are Constrained
Banks, fearful of fines, have been missing out on significant revenues and contributing to financial exclusion by exiting the remittance sector for the following reasons:
1) Inadequate visibility over MSB activities of transferring money on behalf of their customers;
2) Lack of anti-money laundering (AML) monitoring systems to deal with MSB on-boarding and real-time transaction monitoring;
3) Increased regulatory emphasis on the risk-based approach to AML monitoring;
4) Lack of awareness among MSBs about money laundering regulations and techniques used by criminals to launder money in the remittance industry;
5) Terrorist attacks by returning Islamic State fighters.

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