How banks prevent criminal activity

One serious issue within the banking industry is tackling money earned from criminal activities entering into the economy. The act of disguising the origin of “dirty money” is known as money laundering.

Money earned from drug dealing, illegal gambling, human trafficking, funding terrorism, or blackmail are examples of dirty money. In Europe, Mairead McGuinness, the EU commissioner for financial services, estimated dirty money to be worth €133 billion (1.5% of the gross domestic product) in 2021.

Organised networks of criminals, the Mafia, and corrupt officials find ways to make their illicit money look legitimate. Banks and financial institutions in the EU have the challenge of revising the protocols they have in place to try and crack down on dirty money slipping through the net.

KYC, AML, CIP, and enhanced due diligence – get to know these terms and how they are connected with preventing criminals from depositing money earned from unlawful activities into a bank account.

3 mind maps to explain anti-money laundering in the EU

Anti-fraud terminology

Learn the abbreviations, phrases, and main principles used in the banking sector related to anti-fraud. All of this confusing terminology is explained in the mind map “Glossary: Anti-fraud in the EU banking sector”. One important practice in the financial industry is Know Your Customer (KYC). This is a mandatory protocol that banks must take to verify the identity of their customers.

The laws in place

Those working in banks need to know the laws that govern the processes against anti-money laundering. Take a look at the mind map “Anti-money laundering (AML) legal requirements” to see how the Fifth and Sixth Anti-Money Laundering Directives in the EU are cracking down on dirty money.

New laws include an EU-wide ban on cash payments above €10,000, better digital verification of customer identities, and cross-border access to bank account information.

Seeing it in action

There is a step-by-step process of how a bank starts with a new customer, performs background checks, allows them to create a bank account, and monitors for suspicious transactions. Each of these steps is to abide the law to verify customers and assess their risk factor of money laundering.

The whole customer journey including safety checks is illustrated in the mind map “Workflow: Client onboarding KYC process”. See clearly how banks put anti-money laundering steps into practice.

Create workflows and mind maps

Financial businesses that need to comply with anti-monetary laws can benefit from using LinkFacts. Try this mind mapping tool for free in your organisation to simplify customer protocols and assist with staff training.

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