Background Checks and Identity Verification Services to Combat Money Laundering

January 9, 2023

Background Screening Solutions for Money Laundering

Anti-money laundering is a necessary tool for many banks and financial institutions that work with both domestic and foreign clientele. Many businesses are tasked with screening their clients and employees to spot the possibility that they are attempting to launder money throughout your organization. Potential clients may sometimes try to store and hide proceeds from crime, terrorism, drugs, or other illegal activity directly into the confines of your bank or financial institution.

The onus remains on the business leaders to ensure that all of their clients are not tied to organized crime or other criminal activity. Simple background checks and screening tools can uncover detailed information about a potential customer’s criminal and financial history, helping maintain your business’s reputation and avoid clients with criminal affiliations.

Your efforts will ultimately help prevent funds tied to money laundering from influencing global markets, reducing financial corruption, and helping to prevent tax evasion in its many forms. Successful anti-money laundering efforts conducted on behalf of your organization can, at the end of the day, improve society and reduce criminal activity.

Customer Background Checks and Identity Verification: Anti-Money Laundering for Financial Institutions

Many financial institutions, including banks, pension funds, family offices, and hedge funds, are afforded the opportunity to work alongside many wealthy customers, both foreign and international. While the opportunity may prove to be fruitful, the risks can be significant if proper due diligence isn’t performed correctly. Without legitimate resources, financial institutions can become wrapped up in criminal activity and even face criminal charges.

In the United States, many investment firms are required to adhere to the Know Your Client (KYC) standards which were part of legislation under the USA Patriot Act of 2001. Failure to comply with such standards as outlined by the Security Exchange Commission (SEC) can result in hefty fines, trading restrictions, and even legal consequences. Criminal and financial background checks play an important role in ensuring ongoing compliance with such regulations and managing the risk that comes with working with new customers.

While KYC calls for financial institutions to collect several pieces of customer identification, many bad actors have become well-versed in fabricating such materials. Identity verification checks conducted by a specialized third party can spot fraudulent documents and ensure that every potential customer or client is who they say they are.

All financial institutions in the United States must conduct anti-money laundering screening when establishing a new business relationship or there is suspicion of money laundering. Such checks should be completed on a routine basis, several times a year, to help identify fraud and prevent your financial institution from being implicated in criminal activity.

Anti-Money Laundering Managed at the Point of Hire

Identity fraud works hand-in-hand with money laundering efforts, and a few simple products from ISB Global Services can deter high-risk candidates from applying to work at your institutions. The efforts criminals take to launder money through banks, or financial institutions have grown to become especially complex and often include criminals attempting to work at your business. Some criminals may pose as someone else in an effort to gain employment by falsifying their professional credentials, fabricating degrees, and even changing their names entirely.

Today, organized criminals have taken fraud to new heights, applying for full-time work as bank tellers or even high-ranking executive roles to facilitate fraud and money laundering. Simple criminal background checks can spot candidates with criminal histories, but proper hiring practices shouldn’t be limited to just criminal record checks. Financial checks and identity verification can dig deep into an applicant's history, spot identity fraud, and manage the risk that comes with hiring in the financial industry. Such hiring efforts can stomp out money laundering efforts before they begin and ultimately allow your financial institution to focus on only hiring qualified candidates.

Anti-Money Laundering Efforts Provided by ISB Global Services

ISB Global Services maintains a suite of identity verification and background check solutions that can manage risk and deter fraud and money laundering. Failure to meet regulations outlined by the SEC can result in widespread consequences, including fines and even prison time.

Maintain regulatory compliance alongside ISB Global Services and explore a range of identity verification tools and background checks that can be conducted on new hires and potential clients. All of our services can be integrated directly into your existing hiring and anti-money laundering efforts, with many capable of being completed in just days.

Contact ISB Global Services directly to learn more about available solutions for financial establishments of all kinds.