Money laundering continues to pose a plethora of different challenges for organizations. Billions get laundered annually, and financial institutions struggle to keep up with national and international regulations.
It’s 2024 now, with new trends emerging and evolving. Keeping up with the industry’s changes is of utmost importance to ensure that the money laundering problem is kept to a minimum.
Let’s take a look at what the expectations for 2024 and beyond are.
1) Reliance on AI
The reliance on artificial intelligence and machine learning should not come as a surprise. Multiple industries are investing in these solutions.
AML compliance and monitoring get a significant boost from ML. Smart algorithms are capable of improving themselves over time. They automate the monitoring tasks and leave less room for error, unlike having a real person charged with the task.
Alerts, repetitive tasks, and resource optimization are the most notable improvements organizations can expect. Investing in ML and AI boosts those areas and overall compliance operations.
2) Emphasis on Crypto
Despite the fact that many are still skeptical about cryptocurrencies, there is no denying that they play a major role in global fiscal politics.
Regulating crypto transactions is tricky due to their nature. However, the shift in pushing for clear and defined crypto regulations is well and alive.
Hackers take advantage of anonymity and use it to move assets without authorities getting the hang of it.
Stomping fishy transactions via crypto completely is a hard scenario to imagine. Having said that, if the governments fail to acknowledge how much it influences money laundering, the issue will continue to run rampant.
The dark web and other obstacles present additional problems for financial institutions. Not every institution is powerful enough to keep up with the technologies criminals utilize.
There is a demand for cooperation between the institutions and governments, but reliance on other parties does not cut it. Self-regulation looks to be the way forward.
Different organizations face different problems, so it makes sense to find a model that works and lasts long-term.
Of course, committing to the idea of self-regulation is expensive, but if it is an inevitable step for the future, the sooner you start, the better.
4) Transaction Monitoring in Real Time
One thing to be said about real-time transaction monitoring is that it becomes easier to implement this feature even for smaller organizations. The availability of AML software that often comes with screening features is an asset one should not overlook.
Monitoring transactions in real-time and flagging suspicious activity prevents problems from snowballing out of control. Stopping a shady transaction well in advance can save organizations a lot of money.
Hopefully, with the rise of software solutions, more and more institutions will look to implement them and minimize money laundering risks.
5) Emergence of Virtual Reality
Metaverse and other emerging virtual reality technologies might not seem like a significant deal, but they are the opposite.
The emergence of VR opens new ways for criminals to launder money and commit other financial crimes. Smart criminals exploit virtual spaces and replicate real-life scenarios to commit scams.
Luckily, smart anti-money laundering solutions have proven to be useful in these cases. They monitor the activities within a virtual environment and detect suspicious behavior.
VR will continue to grow, and with its growth, it is imperative to come up with regulatory measures to protect organizations and individuals from financial risks.