Micro money laundering has grown to become a huge concern for all companies and governments across the world due to their small-scale nature which avoids detection. Micro money laundering is the act of frequently laundering money but on a small scale instead of a large one which could risk detection from the bank. Thus, the laundered money is spread through smaller digital transactions done every day and not through projects. Traditionally, criminals used offshore accounts and shell companies in order to launder money but they have now instead switched to using online transactions – several small ones to evade government scrutiny. This essentially makes it impossible for governments to trace because it’s not feasible to trace every single small transaction to identify micro-money laundering.
The ever-evolving and growing space of digital finance has made conducting business very convenient and easy. But there is a flip side to every coin, with these advancements, criminals have taken advantage of the simple and easy nature of fund transferring. The newest and possibly most dangerous form of money laundering is micro money laundering. It is on the rise because of how criminals are taking advantage of the AML compliance framework and its loopholes.
One of the main reasons that this form of fraud is turning out to be so successful is the lack of recognition that this is a large threat. Finally, though, regulators and authorities are catching up with the criminals and have realised that their methods are ever-evolving and are beginning to adjust and adapt. They have recognised that AML training should include information about this, awareness, preventative and combative measures. Though, the main solution should stem from technology as that is where the problem has arisen. AML software is the solution to this problem, it can identify individuals that have taken part in such behavior or are actively taking part in fraud as such.
Idenfo is an AML software that helps prevent your business from onboarding an individual that has potentially taken part in money laundering activities. No other software or bank could identify criminal activity in this way, and that is why AML softwares like Idenfo are so necessary to businesses that heavily deal with finances via digital channels and means. KYC (Know Your Customer) and CDD (Customer Due Diligence) are both procedures that are a part of the Idenfo AML compliance platform which are necessary in avoiding and avoiding individuals that have associations with money laundering.