Detecting money laundering

Financial institutions have to have in place solid Anti Money Laundering (AML) frameworks – i.e. adequate policies, procedures, systems and personnel – in order to prevent, detect and report any client using their services (e.g., deposits, transfers, etc.) for the purposes of money laundering and corruption.

The Customer Due Diligence (CDD) process is at the core of any AML framework – note that I will be using the EU AML Directive terminology, in which CDD encompasses the customer identification, risk classification and transaction monitoring. It is important to say, nonetheless, that AML goes beyond the CDD process, as it also includes employee training policies, internal risk assessments and internal audits.

Find below, a possible generic structure that I set up for AML CDD process at a bank.