Modern Banking conduct has been changing with the passage of time. Due to the financial crisis faced by banks, 6% of total banks have been shut down in the US, and it is projected that the figure will reach 20% by 2020. According to S&P Global Market Intelligence, Bank deposits had been decreased by 2.9% in the second quarter of 2018. 2.9% seems a very small percentage but in the banking sector, it really matters. Where is that money going then? This is a curious question. Instead of depositing money in banks people are using other platforms and investing their money as many banks lost their reputation after getting exposed their involvement in money laundering by Organised Crime and Corruption Report Project(OCCRP) of the European news outlet. One of the worst cases was the confession of one of the biggest banks of Denmark DANSKE BANK. They admitted that suspicious transactions of 200 billion euros were processed between 2007 and 2015 through their Estonian branch. Later on, many banks got accused of assisting in money laundering. Fine of 1 million euros was imposed on the Royal Bank of Scotland for being guilty of money laundering activities.
But many banks who did their work truly and had not engaged in any illegal activity are also losing deposits. What is the main reason for the losing Deposits? Many of deposits of banks are diminishing as people lost trust in them, Multiple small banks are on the road to their end. This is the time for banks to take serious actions for their future otherwise deposits will keep shrinking and their deposits will be drained to external investment providers. To gain back the trust of depositors Banks must show them the proof that they are not involved in any illegal activity and identities of their customers are completely secured with them. If banks are really not involved in money laundering and want to stop money laundering through their channel then they must install AML Data Base Software for Banks. Without using an effective solution to deter money laundering practices banks are destined to embark on a downward spiral.
How AML will help banks
Financial institutions especially banks should play a vital role in curbing of financial crime. They should implement strong KYC and AML policies to stop financial crime. AML Database software will help banks to stop money laundering through their channel. Through this software, they would be able to know about the persons who are already blacklisted by Finance authorities or are in greylist. Banks can prevent creating accounts of blacklisted persons or they can keep an eye on the accounts that are on greylist by authorities. A typical AML solution is built on multiple databases to find out persons involved in illegal activities that can risk the reputation of a bank. By using AML database software banks can get rid of money launderers and save themselves from immense fine.
AML best practices for banks
At least for AML Compliance, banks should follow these steps:
1- Perform random AML checks on regular basis on all accounts.
2- Place an account on higher risk if an individual is matched with PEP’s list.
3- Be consistent to update AML checks.
4- Keep an eye on huge transaction through an account.
5 – Must contact responsible authorities for any suspicious activity.
Top ways to increase Deposits
1- Banks must create a good friendly relation with their depositors.
2- Different marketing channels must be used to reach depositors.
3- Apply AML database software to stop money laundering.
4- Provide best plans to depositors to promote their business.
5- Evolve old strategies into newer once.
6- Deeply analyze the behaviour of the depositor.
7- Make clear and understandable depositing Plans.
It is the duty of an organization who is getting a deposit to verify the source of income of depositor. There are multiple service providers who are working throughout the world to verify biodata (Name, Date of birth) and some companies provide address verification service as well to find out the true identity of a depositor. Banks must keep an eye on every immense transaction because one illegal transaction can cost a hefty fine or even cancel of license.