How Innovation Contributes To Fight against Trade-Based Money Laundering

Capital Markets CIO Outlook | Tuesday, October 27, 2020

The rising concern for trade-based money laundering encourages the traders to take an innovative approach to reduce future risks.    

FREMONT, CA: The practice of trading to launder money is a significant concern for the authorities to address. Numerous trade-based money-laundering incidents fall short of driving industry efforts. Trade-based money laundering, a real threat to the global economy, is increasing with the passing years.

Modern-age traders need standard procedures to tackle any illegal trade. Transaction monitoring help traders to track record and identify any suspicious trade activity while establishing anomalies between declared and actual traders. Transaction monitoring can help to collect all relevant documents while any trading processes. This initiative can address the risks and detect any activity of money laundering. It also carries the feature to give alerts in case of any suspicious activities. With the help of KYC, trading companies can initiate extensive due diligence to gain a better understanding of trading processes. The overall transaction monitoring process helps the trading companies develop a valid assessment of the risks involved in trades. Today, the artificial intelligence system is massively contributing to the fight against trade-based money laundering.

The initiatives mentioned earlier are recognized as central pillars of protection against trade-based money laundering. Today, there are numerous steps that trade businesses can take to reduce the chances of laundering risks. Firms need to implement specific procedures that restrict illegal trade and concentrate on training their existing staff to detect any such activity, which could be damaging to anti-money laundering. Trading firms also implement active sets of audit checks and risk assessments that traders must clear to communicate with them.

As trade laundering continues to increase, keeping track of trade finance transactions is becoming more challenging for traders. However, with effective strategies, traders can efficiently address the risks of trade-based laundering and adapt improved regulation required to fight against this emerging threat.

Artificial Intelligence