AML Screening: It’s Not as Difficult as You Think

AML Screening - Its Not As Dificult As You Think HEADER

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Have you wondered why businesses have to do thorough due diligence checks, especially financial institutions before they conduct transactions with you? These checks are Anti-Money Laundering Regulations that the government has in place in order to combat money laundering schemes. 

Globally, the amount of money laundering in a single year is believed to be 2 – 5% of the global GDP, or $800 billion – $2 trillion in current US dollars. And aside from being ill-gotten, the money being laundered are generally used to fund illegal activities such as terrorism.

What does money laundering have to do with coworking spaces?

Coworking spaces might have started as a hub for freelancers, but, it has gained the attention of large corporations and startups as well. 

Some coworking spaces allow companies to utilise their facility as an actual business address. With the pandemic accelerating the future of work, coworking spaces now offer remote workers virtual office setups that provide the same services as a physical office space.

And for those services, coworking spaces are susceptible to falling prey to criminals that might use their space to conduct their money laundering activities. 

With that being said, most coworking spaces do not even know they need to do compliance checks until the government knocks on their door and asks if they are being compliant. 

What is AML Screening?

Anti-Money Laundering screening is one of the ways to analyse the risk of a company’s existing or potential clients.

Businesses use AML screening to ensure that their existing or potential customers are not on any sanctions lists, PEPs, banned or wanted lists, or bad media data. The primary component of the AML compliance programme is customer screening.

What are the benefits of AML screening?

Due diligence checks are a vital part of anti-money laundering compliance. Clients are verified as who they claim to be. So it’s needed for two reasons:

1. Many national governments mandate it. Some AML initiatives, for example, require financial institutions to share information about potential customers via a database. This reduces the likelihood of fraudulent activities.

In a recorded episode of Community Ops – WTF is KYC & AML?, Jeannine van der Linden, Manager of De Kamer and Director of European Coworking Assembly, discussed Know-Your-Customer (KYC) and AML. (And why it’s vital for coworking spaces) with Hector Kolonas of Included.co some of the cases where one or two potential members failed AML screening and how it let her know the risks these people pose in her coworking community if she didn’t have any compliance checks in place.

As a coworking space manager, she says: “Our job is to know what the risks are and alert somebody when they suspect something is happening, so society is protected from all of those things”. 

2. Second, AML screening can help protect businesses. Investing in comprehensive AML screening methods can help secure a company’s financial assets and reputation.

Performing these due diligence checks not only provides security for your company but also allows you to protect your community and your company’s brand. You can protect your brand’s image by ensuring that only confirmed clients are onboarded and that all AML and KYC regulations are followed. Your coworkers won’t have to worry that the person sitting next to them is up to something shady or illegal.

When is AML name screening used?

In order to open a client account, businesses must undergo name screening.

Existing clients’ risk levels can shift over time. As a result, businesses should do name screening on their current customers on a regular basis.

It is integral to protect the company’s reputation. As a result, businesses must include name screening in their hiring or onboarding processes.

Companies must keep control over their collaborators in order to maintain their company reputation. Name screening is used to fulfil an AML obligation known as “the ultimate beneficial owner check.”

What are some pain points in AML screening?

Businesses that tried to invest in AML screening ran into challenges. On-boarding time is one of the difficulties that firms face. Businesses must screen customers in real-time. They need results in 24 hours or less.

Sadly, organisations trying to sustain AML screening efforts have found it difficult to obtain data in real-time. Onboarding and screening slow them down and affect their operations.

Many firms suffer from over-screening. Because their systems are outdated, they ask for information that isn’t completely relevant, which slows down the process. During the screening process, companies must ask for vital information. As a result, they are losing clients. 

Current screening techniques have the potential for inaccuracy. Many companies have staff review documents and enter data manually. You may miss something if you do this. That is why AML screening is inefficient and inaccurate.

How can Cowork.Tools help with AML screening for coworking spaces?

It is important that coworking spaces have the right tools to consistently provide the kind of onboarding experience that coworkers expect and deserve. At all times, we have prioritised simplicity and transparency over compliance.

Using our module, your staff can provide the required documentation at their convenience. They can do it swiftly and effortlessly, allowing you to relax.

Here’s how Cowork.Tools will help your coworking space:

Automated

The AML/KYC Module is a plug-and-play interface that can be integrated into your onboarding process, management software, or CRM package to ensure compliance.

Adaptable to changing legislation, it will be updated across all of your tech channels.

Comprehensive

We cover all aspects of AML/KYC compliance and give reports for your review.

Who better to shape things than an entrepreneur or solopreneur? We’ve got you covered.

Portable

Monitoring your members after onboarding is straightforward and economical. Certified members can then bring their proof of certification everywhere in Europe.

You can check our AML/KYC Module for more info. 

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