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Screen users against over 1100+ global sanctions, PEP, adverse media watchlists and 170K+ news sources.
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Gift Arku
Marketing Associate
In 2019, an elaborate Ponzi scheme in South Africa, Bitcoin Wallet, swindled investors out of an estimated R2 billion. Promising astronomical returns, the scheme targeted unsuspecting individuals with little regulatory oversight. Despite several red flags, the lack of robust ongoing monitoring meant that warning signs were missed, allowing the fraud to grow unchecked.
This incident underscores a harsh reality: financial crimes in Africa are on the rise, with the continent losing an estimated $88.6 billion annually to illicit financial flows (IFFs). For businesses operating in such an environment, relying solely on initial due diligence is no longer sufficient.
Ongoing monitoring, or continuous monitoring, is the process of regularly reviewing customer data and transactions to detect potential financial crimes and ensure compliance with evolving regulations. Think of it as a "health check" for your customer relationships—one that never ends.
Unlike a one-time verification during onboarding, ongoing monitoring ensures that businesses continually assess risks throughout the lifecycle of a customer relationship. This includes tracking transactions, updating customer profiles, and identifying suspicious behaviour.
As recommended by the Financial Action Task Force (FATF), this process involves collecting and verifying key information, such as transaction patterns, to ensure alignment with a customer's risk profile. For businesses, this not only helps mitigate risks but also demonstrates a proactive approach to regulatory compliance.
The primary goal of ongoing monitoring is to keep businesses compliant with AML and Countering the Financing of Terrorism (CFT) laws. But beyond compliance, it serves three critical business objectives:
With Smile ID’s AML Check Solution, companies can automate this process, ensuring continuous vigilance. From screening users against 1,100 global and African sanctions lists to monitoring adverse media in real time, Smile ID empowers businesses to combat financial crime proactively.
Ongoing monitoring serves as the backbone of a robust AML compliance framework, encompassing a series of interconnected processes that ensure businesses stay one step ahead of financial criminals. Each component addresses a specific facet of risk management, collectively building a comprehensive defence against money laundering, fraud, and terrorist financing. Here’s a closer look:
At the heart of ongoing monitoring lies the continuous review of customer transactions. By analysing the nature, volume, and patterns of financial activities, businesses can determine whether transactions align with the customer’s known profile and stated objectives. For instance, unusually large or frequent cash deposits that deviate from a customer’s historical behaviour could indicate potential laundering. Advanced tools, like Smile ID’s real-time fraud detection systems, enable businesses to flag and investigate these anomalies promptly.
Monitoring doesn’t end with onboarding. Regular updates to customer profiles ensure that businesses maintain an accurate understanding of who they are dealing with.
By layering these due diligence processes, companies can dynamically adjust their risk management strategies as customer circumstances evolve.
Related reading: Understanding the Difference Between CDD and EDD in KYC Compliance
Knowing the true beneficiaries behind an account is critical. UBO monitoring identifies individuals or entities that directly or indirectly control an organisation, ensuring transparency around the source of funds. For example, in high-risk industries like real estate or cryptocurrency, where ownership structures can be deliberately obscured, maintaining an up-to-date understanding of UBO is essential.
Regular checks against global and regional sanctions lists help businesses avoid dealings with individuals, entities, or countries subject to financial or trade restrictions. These lists, updated frequently by governments and international organisations, flag high-risk individuals such as terrorists or criminal enterprises. Sanctions screening ensures that businesses stay compliant while protecting their reputation.
Government officials or individuals with close ties to political power present unique risks due to their potential involvement in corruption or embezzlement. Ongoing PEP checks ensure that businesses apply the appropriate level of scrutiny to transactions and accounts linked to politically exposed persons.
Continuous scanning of global news, publications, and other media for unfavourable mentions of clients or their associates is another vital component. Whether it’s a report of financial impropriety or allegations of fraud, adverse media monitoring enables businesses to react quickly, updating risk assessments or escalating due diligence efforts as needed.
By integrating tools that automate these processes, businesses not only reduce the burden of manual checks but also enhance the accuracy and efficiency of their AML compliance efforts.
Ongoing monitoring isn’t a static process; it’s a dynamic and iterative approach to identifying and mitigating risks throughout the customer lifecycle. By embedding vigilance into every step, businesses can stay ahead of emerging threats while ensuring regulatory compliance. Here’s how this process works:
The first step in effective monitoring is to evaluate potential risks associated with customers, transactions, and business activities. This involves analysing data to uncover factors such as geographic exposure, industry vulnerabilities, or transaction patterns indicative of money laundering or fraud. A robust risk assessment establishes a baseline for determining the frequency and intensity of monitoring efforts.
Internal controls are the operational backbone of any ongoing monitoring framework. This includes:
By automating these controls, businesses can streamline their compliance efforts while maintaining consistency.
Real-time monitoring of financial activities is a key component of staying compliant. Businesses must scrutinise transaction data to detect discrepancies or deviations from expected patterns. For instance, an unexpected increase in cross-border transfers from a low-risk account could trigger further investigation.
When suspicious activities are identified, they must be documented and reported to the relevant authorities through Suspicious Activity Reports (SARs). Filing these reports in a timely manner ensures that potential criminal behaviour is flagged for investigation.
Regular internal and external audits help businesses evaluate the effectiveness of their monitoring frameworks. These reviews identify gaps in controls, test compliance against evolving regulations, and uncover areas for improvement. Audits also validate the accuracy and relevance of customer data used in risk assessments.
Employee training is essential to keep teams informed about their roles in AML compliance. By staying updated on regulatory changes, best practices, and the latest criminal tactics, employees can contribute to a proactive compliance culture.
A poorly implemented ongoing monitoring system can manifest in several ways, such as:
These gaps not only expose businesses to financial crime but can also result in hefty penalties for non-compliance.
For organizations operating in high-risk industries or regions, integrating advanced tools and conducting frequent reviews are non-negotiable. Solutions like Smile ID’s AML Check can simplify this complex process, enabling businesses to detect risks early, stay compliant, and focus on growth.
As mentioned in previous sections: To effectively combat financial crime, businesses must implement a proactive and comprehensive approach to ongoing monitoring. Here are best practices that can ensure your monitoring systems are both effective and sustainable:
Rather than applying the same level of scrutiny to all clients, businesses should tailor their efforts based on the assessed risk of each customer. Key practices include:
Technology is essential for scaling compliance efforts while maintaining accuracy.
Documentation should not be an afterthought but an integral part of your monitoring process.
The effectiveness of your ongoing monitoring depends on the continuous improvement of processes and systems.
Equip your team with the knowledge and skills required to implement AML practices effectively.
As businesses grow, monitoring systems must adapt to increasing volumes and evolving threats.
While traditional customer due diligence (CDD) processes provide an essential foundation for compliance, ongoing monitoring systems take this a step further by enabling dynamic, real-time oversight. Here’s why businesses find them indispensable:
Customer profiles are not static. A low-risk customer today could turn high-risk tomorrow due to changes such as becoming a Politically Exposed Person (PEP) or engaging in transactions linked to high-risk jurisdictions. Ongoing monitoring ensures businesses can react promptly to these shifts, safeguarding themselves against unforeseen liabilities.
Fraud schemes are increasingly sophisticated, often evolving faster than static compliance measures can handle. Ongoing monitoring provides the agility to detect suspicious patterns, such as unusual transaction sizes, account activities, or geographic inconsistencies, before they escalate into significant financial crimes.
Regulatory bodies worldwide emphasise continuous oversight as part of the AML and Countering the Financing of Terrorism (CFT) frameworks. Ongoing monitoring systems allow businesses to meet these requirements, minimising the risk of penalties or operational restrictions.
Related Reading: Understanding Kenya's Grey Listing by FATF: A Call for Strengthening KYC Procedures
Businesses that implement robust ongoing monitoring systems demonstrate a commitment to ethical practices. This fosters trust with clients, partners, and regulatory bodies, enhancing overall market credibility.
Manual monitoring processes can be labour-intensive and error-prone. Automated systems not only enhance accuracy but also reduce the time and resources needed to identify and address compliance issues.
By focusing on these aspects, companies can create an environment of proactive risk management, positioning themselves to operate effectively in an increasingly regulated global market.
Despite its benefits, implementing and maintaining an ongoing monitoring system is not without challenges. These drawbacks often stem from the complexity of the process and the resources required for effective execution:
Deploying an effective monitoring system often requires significant investment in technology, training, and infrastructure. For smaller businesses, this can be a major financial hurdle, deterring them from adopting these essential tools.
Automated systems can generate a high volume of alerts, many of which may not indicate genuine threats. This phenomenon, known as false positives, can drain compliance team resources, delay legitimate customer transactions, and strain customer relationships.
The global nature of business today means companies must navigate varying AML regulations across multiple jurisdictions. Keeping up with constant changes and ensuring compliance everywhere adds a layer of operational complexity.
The quality and accuracy of data directly impact the effectiveness of monitoring systems. Inconsistent or incomplete data can lead to missed risks or incorrect alerts, undermining the system's reliability.
While technology is a powerful enabler, over-reliance on automated systems without adequate human oversight can lead to gaps in fraud detection. Machine learning models may not fully understand nuanced behaviours that human expertise can identify.
As monitoring systems become more sophisticated, so do the tactics used by financial criminals. Staying ahead requires continuous updates to software and strategies, which can strain resources and require constant vigilance.
Addressing these drawbacks requires a balanced approach, combining advanced technology with well-trained personnel and regular process evaluations. This synergy helps businesses maximise the benefits of ongoing monitoring while minimising its challenges.
Businesses in Africa face unique challenges when it comes to implementing effective ongoing monitoring systems for AML compliance. Limited access to localised data, rapidly evolving regulations, and the sheer scale of financial crime can make compliance seem daunting. This is where Smile ID’s AML Check Solution excels, offering a comprehensive, automated, and reliable tool built to address these hurdles and empower businesses to combat financial crime efficiently.
See it in action:
Smile ID’s AML Check screens users against over 1,100 global and African sanctions and PEP (Politically Exposed Person) lists, as well as more than 70,000 adverse media sources. This dual focus ensures businesses meet both international AML standards and address the unique risks and regulatory needs across African markets.
Smile ID’s AML Check simplifies compliance with a user-friendly two-step process:
Smile ID goes beyond one-time checks. Automated monitoring for 12 months ensures that businesses stay informed of any new risks associated with previously queried names. With global coverage and trusted data sources like the critical OFAC list, our solution ensures ongoing vigilance against emerging threats.
Smile ID’s AML Check directly addresses the common challenges of ongoing monitoring:
Ongoing monitoring plays a pivotal role in combating financial crime and ensuring compliance. Globally, many regulatory frameworks emphasise its importance:
The fight against financial crime evolves rapidly, requiring businesses to adapt. Technologies like blockchain and AI are revolutionising AML compliance. Blockchain enhances transaction transparency, while AI enables real-time detection of suspicious patterns, helping businesses prevent fraud proactively.
Looking ahead, collaboration between businesses, regulatory bodies, and technology providers will shape the AML compliance landscape. This requires a blend of advanced technology and human expertise.
Ongoing monitoring isn't just a regulatory obligation—it's a commitment to secure operations and protect customers. By leveraging tools like Smile ID's AML Check Solution, businesses can align with global standards while staying ahead of emerging risks.
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