Transaction Monitoring Solutions: Real-Time Fraud Prevention in the Corporate Sector
Financial transaction systems present various growth opportunities for businesses worldwide Transaction Monitoring Solutions: Real-Time Fraud Prevention in the Corporate Sector but fraudsters can also use intelligent solutions to exploit the industries. With the application of transaction monitoring solutions, firms can easily keep track of millions of monetary exchanges simultaneously.Transaction Monitoring Solutions: Real-Time Fraud Prevention in the Corporate Sector
Transaction Monitoring Solutions: Real
Cutting-edge technology can empower businesses to identify sources of funds and the association of money with suspicious activities. In the modern digital world, the application of transaction monitoring solutions is essential to discourage financial crimes. This way, financial institutions can ensure compliance with KYC & AML regulations and avoid hefty fines or permanent bans.
The following sections discuss the significance of KYT solutions, and how state-of-the-art services can discourage financial crimes.
Modern-Day Financial Currency Exchange: A Quick Overview
According to Technavio, the foreign exchange market size will grow to around 1.94 trillion dollars by 2026, showing a CAGR of 8.87% for the forecast period (2021-2026). According to news, North America will contribute to 46% of the market’s growth.
In the modern world, both fiat and digital currencies are a form of money that users can interchange because they have financial value. There are differences between fiat and cryptocurrency. For instance, government agencies issue US dollars. On the other hand, cryptocurrency is a digital asset based on decentralised blockchain networks. Authorising fiat currency requires the involvement of a mediator whereas cryptocurrency relies on localization to detect suspicious transactions.Transaction Monitoring Solutions: Real-Time Fraud Prevention in the Corporate Sector
Cryptocurrencies are not monitored by government agencies and add value to finances globally. To have financial value, all types of currency must fulfil the following standards:
- Medium of Exchange
All currencies must have payment values. Stakeholders in a business deal must mutually agree on the perceived value of the type of money. Cryptocurrency was introduced in the world in 2009 and at that time several businesses had doubts about the utility of digital currency. With technological innovation, crypto gained acceptance both in the public & business world. Transaction Monitoring Solutions: Real-Time Fraud Prevention in the Corporate Sector
- Value of Currency
All forms of money must have a store of utility. For instance, when a customer receives a $100 invoice, the company must have certainty that $100 will have the same worth for the period of 30 days. If the value of money is unstable, the currency is useless because the chances of inflation are extremely high. Moreover, a fiat currency does not hve intrinsic value and an issuing authority determines its worth. Several governments make fiat currencies a legal tender and set it as the standard for repaying debt.
- Unit of Account
Currency must play the role of a unit of account to charge financial transactions by influencing the value of products & services. Moreover, their worth in relation to each other also matters. For instance, a $20 cap is less valuable than a $500 perfume.
Gaining Insight into Transaction Monitoring International Regulations
In the context of transaction monitoring solutions, it is the responsibility of businesses to detect and report suspicious activities to international regulatory agencies instantly. People worldwide use cryptocurrencies to exchange money. Crypto companies must invest in intelligent transaction monitoring solutions to cater to the changing preferences of customers around the globe.
At first, FinCEN revised the guidelines for fiat currencies but with time when cryptocurrencies became popular, the agency issued standards related to digital currencies. Crypto businesses must implement the cutting-edge transaction monitoring solutions and AML screening procedures designed specifically for virtual currencies.
Cryptocurrency transaction monitoring solutions can be easily regulated through constant advancement in modern observation tools. This can happen through employee training workshops and educating workers to identify illegal exchanges in crypto transactions.
Using Crypto Transaction Monitoring Solutions & AML Screenings
The use of digital currencies is becoming popular worldwide. In this light, the significance of following anti-money laundering policies & applying transaction monitoring solutions has become evident.
Using a robust AML/CFT system can help crypto businesses to identify suspicious activities and perform a risk analysis to discourage fraud. In November 2021, around 103 jurisdictions were ordered to follow anti-money laundering & terrorism financing policies regarding crypto. FinCEN is the supervisory body that has applied KYC & AML checks on cryptocurrency operators. This trend will continue as FATF carries on its appeal for standards regarding modern-day technologies.
To discourage money laundering & terrorism financing cases, cryptocurrency service providers must verify the identities of new customers during the onboarding process. With AML screenings & transaction monitoring solutions, vendors can safeguard sensitive user data from external attacks. Other essential regulations regarding crypto transaction monitoring comprise Customer Due Diligence (CDD) and screening accuracy.
The Bottom Line
The popularity of cryptocurrency will grow with time which will also increase the risk of money laundering and terrorism financing. In this light, financial firms must invest in innovative transaction monitoring and AML screening solutions to discourage crime.
Business experts can collaborate with third-party vendors to implement transaction monitoring solutions that are GDPR & PCI DSS-compliant. Hence, business specialists can actively mitigate crime in digital currency exchanges.