AML Solutions – Measures to Curb Financial Fraud during Black Friday

Businesses are moving towards complete digitization but with an increase in fraud risks. Criminal threats are sure to double during Black Friday as retailers and every other industry come with discounts to attract more clients. In this process, criminals also try to spend their illicit funds across different financial systems to convert them into clean money.

In order to prevent financial and reputational losses, companies need to invest in upgrading their digital onboarding processes. Integrating AML solutions can work out a great deal for industries to secure their operations during Black Friday. The Anti-Money Laundering (AML) software market is expected to reach $5.8 billion by 2027. This blog further discusses applications of automated IDV services in digital businesses.

The Financial Fraud Triangle

Companies are making efforts to survive in the competitive market during Black Friday. While online shopping, currency trading, and investment experienced a spike during this event, industries face a backlash in preventing fraud risks. Furthermore, digital payment and remote purchases are making AML compliance more challenging.

Fraudsters are targeting every industry from retail and fashion to the property for concealing their illicit funds. They carry out unlawful acts to escape AML verification and exploit businesses. During Black Friday, industries are dealing with a huge customer flow and screening each of them is burdensome. Therefore, to deter fraud risks, digital businesses need to bring in AML solutions as efficient countermeasures.

AI-powered anti-money laundering systems involve the use of automated Machine Learning (ML) tools that pace up secure customer onboarding. It reduces the burden on business management and makes identity verification more accurate. Industries lack transparency which aids as one of the reasons for creating criminal enough room. Moving on, fraudulent behavior is driven by several causes and 3 of the most prevalent are discussed in the next section:

Financial Pressure

Economic pressure forces fraudsters to look for unlawful ways. Individuals affected by monetary instability hold the most chances to commit account takeover, identity theft, and other such practices. To escape AML compliance, jobless people use synthetic identities for availing governmental financial benefits.

The strict AML monitoring also adds as the force behind white-collar crimes and high-profile financial fraud. Regulatory bodies see money laundering as one of the most severe crimes. They mandate industries to establish necessary anti-money laundering precautions, especially during high times of fraud such as Black Friday.

Loopholes Serving as Opportunity

Financial instability is not the only triggering force that causes fraudulent behavior, loopholes within industry systems is another reason. Lax AML compliance measures, identity verification mechanisms, and ongoing checks serve as opportunities for criminals. Fraudsters find flaws in digital businesses and exploit their financial system to hide their illicit funds.

The Process of Rationalization

The final pillar of the criminal threats triangle is the process of rationalization. This involves self-conviction where the fraudsters don’t see unlawful actions as wrong. They have justifications such as personal needs or escaping anti-money laundering scrutiny for flowing their proceeds of crime. Therefore, industries should make AI-powered AML screening services a part of their fraud prevention mechanism. This way, businesses can deter criminal threats in the first place, especially during Black Friday. 562

AML Systems – Steps to Prevent Fraud During Black Friday

Industries looking forward to onboarding a team of risk analysts and IT experts for Black Friday eve are surely not putting in enough effort. Human error aids as one of the main causes of creating loopholes, criminals are well aware of how to exploit them. Therefore, digital businesses need to bring in more advanced AML solutions for deterring financial crimes such as bank account takeover, credit card fraud, payment scams, money laundering, and illicit investment.

Industries making efforts to generate more profits during Black Friday require enhanced AML solutions for fraud prevention. Furthermore, risk management, customer monitoring, and detecting suspicious financial behaviors are other requisites to consider before stepping into the competitive market. AI-powered AML security solutions provide the following strategies to online companies for staying a step ahead of fraudsters during Black Friday:

  • Accurate collection of Personally Identifiable Information (PII), source of funds data, and financial backgrounds
  • Data extraction by using OCR technology to eliminate data discrepancies
  • Facial recognition for authenticating payments
  • Ongoing monitoring to keep track of transactions
  • Liveness detection to ensure customers’ real-time presence
  • Suspiciousness detection and reporting to the concerned regulatory authorities for AML compliance

Concluding Remarks

Developing an effective AML system has become a liability for digital businesses to counter fraud risks during Black Friday. As criminals see this event as their favorite to conceal illicit funds, industries need to bring in efficient countermeasures. In this regard, AI-powered AML solutions are enabling digital businesses to ensure secure shopping, investment, and trading during Black Friday.