Money laundering is one of the most common ways that scammers or even organised crime syndicates use to “clean” up the funds they have gained from illegal sources and nefarious ways. This can be through sales of drugs, extortion and fraudulent activity. They need to channel the money through a reputable source like a bank or financial institution so that the money is then able to be spent on an open market. However, banks and financial institutions are wise to this activity, and so they have checks and balances in place to make life hard if not impossible for the money laundering gang or individual.
It’s why they have identity checks to make sure that customers are who they say they are. It’s where an AML Identity Check is very useful to banks and financial institutions. It is a welcome addition to their fight against financial crime.
The idea is that the identity checks will make it impossible, or at least very difficult, for the criminals, to be able to find ways of getting the money through the system. It should act as a way of deterring the criminal from attempting to do it in the first place. With detection made easier, it puts criminals at great risk of being discovered and subsequently prosecuted. So, while it may seem to be an annoyance and an imposition to our banking lives, it’s a very necessary weapon that the banks have to stop these people from ripping us off and depriving us of our hard-earned income.