Top Tips for Businesses to Spot Money Laundering and Fraud

A person looking through a magnifying glass.

Countries across the world are showing an increased drive to clamp down on financial crimes. Fraud and money laundering are international problems, and a global response is required to combat them effectively.

The UK is playing its part. Last month, the Economic Crime and Corporate Transparency Act received Royal Assent, the latest piece of legislation designed to tighten money laundering controls in the country.

The Act introduces several wide-ranging reforms, including a new offence of failure to prevent fraud for large firms, identity verification requirements for new and existing directors registered at Companies House, and unlimited fines for law firms.

The new legislation builds on the Economic Crime (Transparency and Enforcement) Act introduced last year and marks the latest step in the move towards increased regulation to protect society from money laundering and fraud.

Organisations worldwide lose an estimated 5 per cent of their annual revenues to fraud, according to Occupational Fraud 2022: A Report to the Nations.

Fraud takes many forms, including corporate fraud, consumer fraud, tax fraud, and identity theft. 

After this year’s international Fraud Awareness Week, a global effort to minimise the impact of fraud by promoting anti-fraud awareness and education, our team at AML & Compliance share their top tips to prevent money laundering and fraud by encouraging good practice across all regulated sectors.

1. Be wary.

It can be easy to become complacent, particularly if you have been in a role or with a company for a long time. However, regardless of how frequently you might have undertaken a task, you must remain sceptical and continue to question documents, transactions, information and deals.

2. Develop a proportionate response.

An initial risk assessment can help businesses put in place an anti-money laundering (AML) programme that fits their needs. Every financial institution’s AML policy should include:

  • Know Your Customer (KYC), a mandatory process for identifying a customer or client’s identity at the start of a business relationship. This information must be verified periodically over time.
  • Customer Due Diligence (CDD) involves conducting background checks and undertaking a risk assessment of potential and existing customers.
  • Customer and transaction screening.
  • Suspicious activity reporting.

3. Regularly review systems and controls.

Introducing effective policies, procedures, systems and controls to identify and help prevent any instances of money laundering is the first step. Continuing to review them regularly and updating them as and when required is the crucial next stage in maintaining a robust response.

4. Be aware of where you might be vulnerable to fraud.

Regular audits from an experienced professional ensure compliance and help businesses stay on top of their AML obligations. An independent audit examines and evaluates a business’s AML procedures, including making suggestions for any changes that might be required.

It is recommended that a business operating in the regulated sector perform such a review every two years, although large corporations may consider an annual review more appropriate.

5. Training

Ongoing dedicated staff training programmes to ensure existing employees and new starters can detect and identify any potential instances of money laundering or fraud is vital to ensure an effective defence.

Compliance Solutions for Regulated Businesses

At AML & Compliance, we understand precisely what is required from all regulated businesses and have the experience to help devise and produce an effective AML compliance programme to fit your needs.

We can help organisations of all shapes and sizes from across different sectors to undertake a risk assessment to ensure that they are compliant with AML regulations and have the necessary policies and procedures in place to avoid any breaches.

A risk assessment provides valuable insight into a business when performed correctly. Along with an overview of risk, these crucial assessments also highlight issues within the business, so it is essential to undertake a risk assessment properly. All of a company’s building blocks must be considered, including its staff, clients, operations, and finances.

By working with AML & Compliance, a business can be assured that we will bring the required level of knowledge and expertise needed to perform a risk assessment which has value to the business and is not simply a box-ticking exercise. Our team can also provide a full range of services that include:

  • Consultancy.
  • Compliance Policies.
  • Training.
  • Handbooks.
  • Auditing.

Our services focus on businesses’ Anti-Money Laundering and Regulator requirements through the implementation of effective policies, procedures, training, and consultancy. We also provide continued monitoring of staff and ongoing training to ensure that everyone within a business is aware of the latest requirements and complies with their responsibilities.

Get in Touch

If you believe your business may be at risk or wish to confirm your firm is achieving the required standard of AML and Compliance, we can help. We offer a full range of services focused on ensuring businesses across all regulated sectors create, maintain and evidence their compliance with the requirements of their regulators and legislation.

Our Packaged Services include:

AML Policy and Procedures including auditing and reporting

AML and Compliance Administration Management

These packages have been designed to provide a core compliance service to regulated businesses in the most cost-effective way to manage and control their AML and Compliance processes.

We adopt a sensible and pragmatic approach to fees, ensuring that we are competitive and always add value. As necessary, we will agree on packaged services to control cost and enable clients to spread payments to alleviate cash flow, yet ensure services are provided when needed. If you want to discuss our services in more detail, contact us at 0203 985 8553, email us or complete an enquiry form.