Strengthening AML Compliance with AI-driven Solutions Like VERISafe

In 2024, Malaysia saw an increase in anti-money laundering (AML) enforcement actions, with notable cases such as the RM96,250 fine imposed on Habibgroup 's Habib Jewels for non-compliance with suspicious transaction reporting (STR) requirements. Similarly, Bank Negara Malaysia (BNM) issued fines to 14 financial institutions in early 2024 for failing to submit timely and accurate data, further reflecting the country’s efforts to tighten AML measures.

As money laundering techniques become more sophisticated, especially with methods like cyber-enabled laundering and trade-based money laundering (TBML), financial institutions are facing increased pressure to modernize their compliance frameworks. This is where AI-driven solutions like VERISafe can serve as the first line of defense against money laundering.

Here are some notable examples of major AML fines in 2024, demonstrating the need for advanced compliance tools like VERISafe:

• Bank Pertanian Malaysia Berhad (Agrobank) was fined RM660,000 for failure to conduct timely sanctions screening on its customers and beneficial owners.
• Habib Jewels Sdn. Bhd. was fined RM96,250 for serious failure in submitting suspicious transaction reports (STR) to BNM as part of their compliance process. This emphasizes the need for timely updates and strong AML systems.
• TNG Digital Sdn. Bhd. (TNGD) received a RM600,000 fine for allowing UNSCR and MOHA sanctioned individuals to use its eWallet on 2 separate occasions. In both cases, it seems that human error and minimal customer due diligence were conducted, thus allowing these individuals access to the Malaysian financial system, contravening the Anti-Money Laundering, Countering Financing of Terrorism, and Targeted Financial Sanctions for Financial Institutions under the Financial Services Act.

Emerging AML Trends and Regulatory Focus

Regulators are increasingly focusing on new areas of risk, making it essential for organizations to adopt cutting-edge technology like VERISafe to stay ahead of compliance requirements.

• Cryptocurrency Transactions: With growing adoption of digital currencies, regulators are placing more emphasis on compliance within cryptocurrency exchanges and wallets.
• Beneficial Ownership Transparency: Authorities are demanding more clarity on the true owners of assets, pushing financial institutions to enhance due diligence.
• Enhanced Due Diligence for High-Risk Customers: Banks must rigorously verify the source of funds, especially for high-risk clients.
• Politically Exposed Persons (PEPs): Stricter regulations require financial institutions to closely monitor transactions involving PEPs to prevent potential misuse.
• Adoption of AI and Machine Learning: Technology is now playing a vital role in identifying suspicious activities, reducing false positives, and streamlining AML compliance processes.

Conclusion: The Role of VERISafe in AML Compliance

As global regulatory frameworks evolve, financial institutions face growing pressure to enhance their AML controls. Real-time monitoring, AI-driven risk assessment, and machine learning can provide a powerful defense against increasingly sophisticated laundering techniques. By adopting tools like VERISafe, organizations can safeguard themselves from hefty fines, protect their reputations, and stay compliant in an ever-changing regulatory environment.

These real-world examples from 2024 underscore the necessity of proactive AML strategies. As financial crimes become more complex, institutions can actively protect themselves from financial and reputational damage by adopting AI solutions that ensure compliance with local regulatory requirements.

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