When it comes to financial services crimes, money laundering is among the most difficult to tackle because of the complex trail of evidence involved.
Criminals who want to hide dirty money – often the proceeds of drug trafficking or other illegal activities – will go to great lengths to conceal their crimes by moving money around, changing currency, and then investing in legitimate business ventures.
The scale of the problem is enormous. In its 2018 National Money Laundering Risk Assessment, the U.S. Treasury Department estimated that approximately $300 billion may be laundered in the U.S. alone.
In Canada, meanwhile, the federal government recently pledged to do more to combat the problem with a new anti-money laundering (AML) task force and more funding for investigating organizations.
For banks, being involved in a money-laundering scheme carries significant risk, both reputational and financial. Some banks have faced fines in the range of $300-$900 million for failing to safeguard against these crimes.
While large banks often have AML teams that work with their fraud departments to help facilitate compliance with regulations, many financial institutions are still falling short.
Powering AML efforts with video-based business intelligence
This is where tools like video-based business intelligence software can help. When surveillance video is combined with a bank’s ATM/teller transaction data and analytics, it can be a powerful AML tool for finding unusual, high dollar transactions and patterns in transactions that could indicate money laundering.
The value of these solutions is twofold: they scour all bank transaction data for irregularities and highlight trends and anomalies, but they also tie every ATM and in-branch transaction to video so you can investigate the time, place and people involved. Evidence can be easily packaged for authorities and archived for your institution’s records.
With March Networks’ Searchlight for Banking software application, for example, clear video evidence can be captured together with transaction information when the software identifies the following “red flag” transactions or patterns:
Repeated, high dollar transactions – Someone that is continually depositing, withdrawing or transferring large amounts of money could be involved in money laundering. Searchlight can raise an alert if the same person makes repeated transactions above a certain dollar amount, and within a short timespan (for example, the same day or week). You can sort transactions by amount, card number or account number so you can easily review all movements of large sums of money and pinpoint patterns involving the same account.
Withdrawals below a certain threshold – Sophisticated criminals are aware that banks set a daily maximum on withdrawals specifically for AML controls. Sometimes, criminals involved in money laundering will withdraw a dollar amount just below the maximum, so as not to raise alarm bells. But with video-based business intelligence software, you can outsmart the criminals by searching for transactions just below the maximum. I know of one March Networks banking customer that is doing just that with Searchlight. Because they can easily search and sort transactions by amount, they can review all transactions just below the daily max.
Suspicious new account activations – Criminals involved in money laundering often set up bogus businesses or shell companies and bank accounts to help facilitate their crimes. Video-based business intelligence solutions like Searchlight can log information on all new account activations, so you can quickly review this data on a weekly or monthly basis. Because all transactions are tied to video, you can actually see who is conducting the transaction and investigate the circumstances around what has occurred. Did the bank employee follow Know Your Customer (KYC) procedures for new accounts, including asking for photo ID? You can review the video to find out.
While video surveillance is traditionally seen as a tool for enhancing physical security, when video is combined with transaction data and analytics to create video-based business intelligence it can have amazing fraud-fighting benefits.
Detecting money laundering is one advantage, but applications like Searchlight can also help detect debit and credit card fraud, ATM skimming and cash harvesting, as well as internal theft and compliance issues and more.
Have a question about how video-based business intelligence can help your bank? Post it below: