Specialised Solutions for E-Money Institutions’ AML/CFT Compliance

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CFT), and fraud prevention solutions for e-money institutions' anti-money laundering compliance that are tailored to applicable AML/CTF (aka CTF) laws, regulations, AML/CTF supervisors' guidance for different types of e-money institutions, sector-specific red flags and indicators, to help your business meet applicable obligations that cover electronic money laundering and terrorist financing risk mitigation, fraud prevention, the detection and handling of other types of financial crime.

We have designed our AML solutions to help you navigate the complexities of e-money institutions' AML requirements in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of e-money institutions' AML compliance, including but not limited to

• Business Profile and Strategic Factors:
• Your commercial objectives
• Your products
• The size and structure of your business
• Your available AML/CTF compliance technology and resourcing
• Your risk appetite for AML/CTF-related risks
• Your governance framework and reporting lines
• Your client demographics
•  Your countries of operation

 

• Applicable Regulatory and Fraud Prevention Obligations:
• AML/CTF regulations for e-money institutions
• Any e-money institutions' fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, e-money institutions’ obligations under:

• Privacy laws
• Financial market laws
• Fair trading laws
• Financial licensing requirements
• Other relevant regulatory frameworks

• Operational AML/CTF Compliance Requirements:

• Money laundering and terrorist financing (ML/TF) risk assessment
• AML risk management
• Customer due diligence (CDD) and Know Your Customer (KYC) obligations for e-money institutions
• Enhanced customer due diligence
• Ongoing customer due diligence and transaction monitoring
• PEP identification and sanctions compliance
• Staff vetting and AML/CTF training
• Ad-hoc and periodic reporting
• Other obligations relating to e-money institutions' anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

 

 

What Jurisdictions Do Our E-money Institutions’ AML Solutions Cover?

• E-money Institutions' AML Solutions in Australia: E-money institutions' AML requirements in Australia are outlined under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, with supervision by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
• E-money Institutions' AML Solutions in New Zealand: E-money institutions' AML obligations in New Zealand are governed by the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, supervised by the Department of Internal Affairs (DIA) and sometimes by the Financial Markets Authority (FMA), depending on the specific aspects of the business.
• E-money Institutions' AML Solutions in the United Kingdom: E-money institutions' anti-money laundering requirements in the United Kingdom are specified under the Electronic Money Regulations 2011, the Payment Services Regulations 2017, and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, and their subsequent amendments, with oversight by the Financial Conduct Authority (FCA).
• E-money Institutions' AML Solutions in the United States: E-money institutions' AML obligations in the United States are mandated under the Bank Secrecy Act (BSA) and the USA PATRIOT Act, with supervision by federal regulators such as the Federal Reserve, the Office of the Comptroller of the Currency (OCC), or state regulatory agencies, depending on the nature of the business. Additionally, state-level money transmitter laws may apply.
• E-money Institutions' AML Solutions in the European Union: E-money institutions' AML compliance across the European Union follows the Electronic Money Directive (EMD), the Payment Services Directive 2 (PSD2), and the Sixth Anti-Money Laundering Directive (AMLD6), with supervision by National Competent Authorities (NCAs) in each member state.
• E-money Institutions' AML Solutions in Singapore: E-money institutions' AML requirements in Singapore are outlined under the Payment Services Act 2019, the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, the Terrorism (Suppression of Financing) Act, with supervision by the Monetary Authority of Singapore (MAS).
• E-money Institutions' AML Solutions in the Cayman Islands: E-money institutions' AML requirements in the Cayman Islands are specified under the Anti-Money Laundering Regulations (2020 Revision), supervised by the Cayman Islands Monetary Authority (CIMA).
• E-money Institutions' AML Solutions in the British Virgin Islands (BVI): E-money institutions' AML obligations in the BVI are governed by the Financing and Money Services Act, 2009, the Anti-Money Laundering Regulations, 2008 (as amended), and the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008, with supervision by the British Virgin Islands Financial Services Commission (BVIFSC).
• E-money Institutions' AML Solutions in Bermuda: E-money institutions' AML obligations in Bermuda are outlined under the Proceeds of Crime Act 1997, the Digital Asset Business Act 2018 (if applicable), and the Anti-Money Laundering and Anti-Terrorist Financing Regulations 2008, supervised by the Bermuda Monetary Authority (BMA).
• E-money Institutions' AML Solutions in Panama: E-money institutions' AML requirements in Panama are governed by Law No. 23 of 2015, with supervision by the Superintendency of Banks of Panama or the Superintendency of the Securities Market, depending on the nature of the business.

 

What Types of E-money Institutions Do We Support?

Focusing on e-money institutions' money laundering (ML), terrorism financing mitigation (TF), and fraud prevention, our E-money Institutions' AML solutions cover the following types of e-money service providers and institutions that are deemed to be AML/CTF designated service providers (aka "reporting entities”):

• Electronic Money Issuers
• Payment Service Providers
• Mobile Wallet Providers
• Buy Now, Pay Later (BNPL) Providers
• Prepaid Card Issuers
• Online Payment Platforms
• Digital Remittance Companies
• FinTech Companies Offering E-money Services
• Offshore E-money Institutions
• Other businesses subject to the e-money institutions' AML requirements under local laws

Additionally, we provide AML/CFT solutions for related financial services covering the capital-raising aspect of the business, including but not limited to non-bank deposit-taking and raising funds from retail and wholesale investors, addressing the money laundering, fraud, and terrorism financing issues for the entire AML/CFT regulated part of your business.

 

E-money Institutions’ AML Advisory and Support

Our AML/CFT advisory services for e-money institutions include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the e-money institutions' AML requirements for different processes, including but not limited to customer due diligence (CDD), transaction risk scoring, transaction monitoring, customer onboarding and know-your-customer (KYC) analysis, and other AML processes. Also tailored to the specific money laundering and terrorist financing (ML/TF) risks involved in these processes, helping you with effective ML/TF risk management.
• Electronic money fraud risk management advice: Advising on measures, controls, and processes for detecting, preventing, and responding to different types of fraud, scams, and other types of financial crime relevant to e-money institutions. Also, tailored to electronic money fraud environment, risk management practices, and stakeholders' expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising e-money providers on AML/CTF issues related to maintaining and expanding their banking relationships, complying with banks' AML/CTF risk appetite standards, recall procedures and expectations, and other operational requirements.
• Operational AML/CTF advice: Advising support and KYC teams on day-to-day onboarding, support queue management processes, allocating AML/CFT resources effectively, and making operational improvements to enhance overall customer experience and AML compliance efficiency.
• Specific matter advice (difficult clients, high ML/TF risk matters, customer due diligence for high-net-worth clients, complex transactions and more): Advising on handling specific AML/CTF issues related to clients and complex and unusual transactions, including assessing the adequacy of Sources of Wealth (SOW) or Source of Funds (SOF) information and documentation for specific enhanced due diligence (EDD) cases.
• Peer benchmarking and best practices: Helping e-money institutions compare their AML/CFT practices with industry standards, AML/CTF supervisor guidance, and internationally recognised best practices set up by international organisations like the Financial Action Task Force (FATF) for complying with e-money institutions' AML/CFT obligations.
• Government agencies liaison advice: Advising senior management and compliance teams on handling relationships with external bodies, including AML/CTF supervisors and law enforcement agencies, such as the FIU or its local equivalents.
• AML/CFT audit advice: Advising senior management and compliance teams on matters related to the statutory AML/CFT audits, including auditors' guidelines, requirements, AML/CFT audit process, and obligations related to the audit's outcome, tailored to both generic e-money institutions' anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help e-money institutions to effectively navigate situations involving an AML/CFT breach, warning, or investigation. The cost of non-compliance can result in significant regulatory fines and penalties, as well as irreparable reputational damage. Therefore, when you are on your supervisor's radar, it's essential to have AML/CFT advisors who know how to set things right and effectively engage with AML/CFT supervisors and other stakeholders. For more details, please visit our Remediation Solutions page.
• Further information: You can visit our AML advisory page for an extensive list of AML/CFT advisory services we offer to support e-money institutions' anti-money laundering compliance, as well as AML/CFT compliance for other types of financial institutions and businesses subject to the AML/CFT regime.

 

AML/CFT Training and Capacity Building

We offer the following set of AML/CFT training and education solutions tailored to the e-money institutions' AML/CFT compliance requirements:

• Customised AML/CFT Training Solutions: Specialised AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the e-money institutions' AML requirements, AML/CFT awareness, best practices, and ML/TF red flags.
• Up-to-date Regulatory AML Updates: Keeping your compliance officers, managers, and teams updated with changes in the e-money institutions' AML requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to electronic money laundering, terrorist financing, fraud, and other types of financial crime.
• Practical Workshops: Interactive workshops for effective and goal-oriented AML/CTF compliance, capacity planning, and resource allocation, covering:

• KYC procedures for e-money institutions
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The electronic money laundering risks, common money laundering schemes and terrorist financing methods
• Improvements in clients' onboarding and transaction monitoring procedures
• Reg-tech for AML compliance
• Internal and external AML/CTF reporting
• Related risk and compliance issues, including financial crime prevention
• Application of the risk-based approach to electronic money laundering, fraud risks, and terrorism financing
• Suspicious matter reporting guidelines
• The implementation of customer identification programs and KYC procedures
• Strategic and operational ML/TF risk management
• AML/CTF specifics of cross-border transactions
• Other obligations related to the e-money institutions' AML requirements

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world electronic money laundering, terrorist financing, and common electronic money fraud scenarios, as well as specific challenges related to the e-money institutions' AML/CTF compliance that your business is likely to face.
• Further information: You can visit our AML training solutions page for an extensive list of AML/CFT training solutions we offer to e-money institutions and other businesses subject to AML/CFT regulations.

 

Comprehensive AML/CFT Managed Solution for E-money Institutions

Our e-money institutions' AML/CFT compliance management solutions include but are not limited to:

• AML/CFT Compliance Leadership: We act as your dedicated AML/CFT compliance officers (aka "Money Laundering Reporting Officers" or (MLROs)) and as compliance managers, fully managing AML/CFT compliance and handling the e-money institutions' anti-money laundering obligations for your business.
• E-money institutions' Anti-money Laundering Risk Management: Conducting detailed assessments to identify ML/TF risks, assess their inherent impact and likelihood of occurrence for your business, evaluate the effectiveness of mitigations and controls in place, and formulate residual risk ratings.
• Managing Client Onboarding Process and Customer Due Diligence: Implementing robust Know Your Customer (KYC), Know Your Business (KYB), customer due diligence (CDD), and enhanced due diligence (EDD) processes, for all types of clients, including higher ML/TF risk clients.
• PEP and Sanctions Screening: Managing thorough compliance with AML surveillance requirements by screening against global sanctions and politically exposed persons (PEPs) lists. This covers both initial and ongoing screening, as well as escalation processes for true positives.
• UBO Verification Streamlining: Verification of beneficial ownership in line with the e-money institutions’ AML requirements, identifying and assessing individuals who hold ultimate control over assets. This includes initial and ongoing checks, with procedures to address discrepancies and high-risk cases as they arise.
• AML Transaction Monitoring: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions, helping you comply with the e-money institutions’ AML requirements in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and Electronic Money Fraud Prevention Solution: Related to the above, we also help with the implementation of fraud alerts and red flags to detect, prevent, and respond to fraudulent transactions and activities.
• AML/CFT Tech Handling: Leading the alignment of AML/CFT technology implementation with your business processes and AML/CFT objectives. This also includes reviewing AML/CFT technology against the e-money institutions’ AML requirements and your core policies and procedures.
• AML/CTF and Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF-designated entities—such as your banking partners, FX platforms, liquidity providers, finance providers, etc.—to help you manage your AML/CTF compliance-related communications.
• Internal AML/CFT Reporting Solutions: Facilitating structured reporting workflows for your board and its delegate committees, with a specific focus on AML/CFT compliance. This includes:

• preparing and presenting comprehensive AML/CFT performance metrics
• providing insights into AML/CFT compliance effectiveness
• reporting on the effectiveness of internal controls and mitigations for your general AML/CFT obligations and the sector-specific electronic money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to e-money institutions’ AML requirements
• ongoing progress against your organisation-wide AML/CFT compliance calendar
• alignment of your business's AML/CFT performance with specific project goals and relevant KPIs
• other factors to ensure that the management function is well-informed and aligned with the AML/CFT compliance requirements for e-money institutions.

• E-Money Institutions’ AML and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with e-money institutions’ anti-money laundering requirements for reporting captured activities and transactions. This includes managing externally reportable matters covered by the following report types: Suspicious Activity Reports (SARs), Suspicious Matter Reports (SMRs), Suspicious Transaction Reports (STRs), Prescribed Transaction Reports (PTRs), Threshold Transaction Reports (TTRs), and their equivalents.
• Periodic AML/CFT Reporting: Organising and overseeing the preparation, data storage, and effective submission of required periodic reports to your AML/CTF supervisors, helping you comply with e-money institutions’ AML requirements for statutory reporting.
• Electronic Money Fraud Prevention Management: Implementing targeted fraud prevention measures, enhancing internal controls, and helping you comply with internal policies and external regulations. We work to mitigate fraud risks without disrupting business processes, aligning fraud prevention efforts with your broader compliance objectives.

 

KYB Solutions for E-money Institutions’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with e-money institutions' AML requirements. These include:

• Establishing ML/TF risk scoring models and parameters for different risk categories: We establish criteria to assess the ML/TF risk levels of your client base by identifying key risk factors based on their business nature, activities, jurisdictions, and other relevant characteristics and develop a risk scoring model to classify clients into different ML/TF risk categories such as low, medium, and high risk.
• Implementing a Customised KYB Process: We can help you roll out the KYB process across all departments to help your teams become sufficiently trained and equipped to handle clients' ML/TF risk effectively when it comes to verification, monitoring, ongoing due diligence, and other processes.
• KYB Technology and Automation: We select and evaluate technologies that can automate various parts of the KYB process, such as data collection, risk scoring, sanctions screening solutions, and ongoing monitoring.
• KYB-Related Escalation Process: We can develop and implement a clear escalation procedure for handling high-risk clients or irregularities, including the triggers for escalation, the actions required at each step, and the responsibilities for resolving these issues.

 

Core Policies and Procedures for E-money Institutions’ AML/CFT Compliance

We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective e-money institutions' AML/CFT compliance management, including the following:

• E-money institutions' AML/CFT Framework Development: Covering specific e-money institutions' AML requirements and obligations under national AML/CTF laws and regulations, any applicable AML/CFT guidance, your risk appetite, your existing human and technology resources, your business structure, your history of AML/CFT compliance, and your current and future business goals.
• AML/CTF Risk Assessments: Focused on the e-money institutions' AML requirements for risk management as they relate to specific ML/TF risks faced by your business in terms of its size, products, client types, jurisdictions of operation, delivery channels, and the financial institutions it interacts with when delivering its services. Also covering the assessment of the effectiveness of existing controls and mitigations in place to determine the residual risk rating for both general ML/TF risks relevant to the most designated service providers/AML/CFT reporting entities and industry-specific ML/TF risks faced by e-money institutions as these apply to your business operations. Visit our AML/CTF Risk Assessment page for more information.
• Comprehensive AML/CTF Programs (aka "AML/CFT Programme" in some jurisdictions): When it comes to e-money institutions' anti-money laundering compliance, your AML/CFT program is a core document that details how your business complies with various compulsory AML/CFT obligations, covering:

• the initial and ongoing CDD and EDD processes
• verification methods and requirements for identity, address, and source of funds
• internal and external reporting
• ongoing due diligence
• transaction monitoring
• employee vetting and training
• PEP and sanctions screening, and more

Our e-money institutions' AML solution is about grounding your AML/CTF program in reality and developing it based on your circumstances, including:

• your AML/CFT Risk Assessment
• your available ML/TF systems and controls
• your available resources
• your compliance budget
• your AML/CTF compliance team's experience and size
• your stakeholders' interests
• your available AML technology and other relevant factors
• Further Information: Visit our AML/CTF Programs page for more information.

• E-money institutions' AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of e-money institutions' AML/CTF compliance. This is why our solutions cover the development and enhancement of a detailed set of AML/CTF procedures and protocols to meet the distinct needs of your business, with a focus on effective AML risk management across various business processes and the e-money institutions' AML requirements as they apply to each step of your customer journey.
• AML Manuals and Guidelines: These are more detailed, practical resources that support the procedures by providing step-by-step instructions, specific reference points, and standards. Depending on your business size and complexity, we develop and enhance internal manuals and guidelines necessary for effective and efficient AML/CTF compliance. These include AML Operating Manuals, guiding materials, and guidelines that outline what to do for each process, step, or decision within your procedures.
• ML/TF Controls Mapping: Implementing controls based on your documented risks is another cornerstone of e-money institutions' anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with e-money institutions' AML requirements, address specific financial crime, money laundering, and terrorist financing trends, and respond to any findings from internal and external AML/CFT auditors and supervisors.
• AML Red Flag Identification and Response Protocols: This is another area where a well-written AML policy or program must face the reality of operational speed, the workload across different teams, available tools, client base size, and other factors. That is why another part of our e-money institutions' AML/CFT solution focuses on developing clear guidelines for identifying and responding to red flags indicative of fraud, money laundering, or terrorist financing activities, enabling you to take timely and appropriate action in different circumstances.
• AML/CTF Policy Update: Assisting with the review and enhancement of your core AML/CTF documents and operational procedures to reflect changes in your AML policies, including those caused by:

• updates in the AML/CTF laws, e-money institutions' AML regulations or AML supervisors' sector guidance
• internal changes in your business structure, size, and resources
• the launch of new products or expansion to new jurisdictions
• changes in your risk appetite
• changes in related obligations, such as privacy laws, information sharing, electronic money fraud prevention requirements, and more
• AML/CFT issues identified during internal or external reviews or audits
• other relevant factors

 

AML/CFT Technology Integration Support

Streamlining AML Compliance: Our e-money institutions' AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient e-money institutions' anti-money laundering compliance management. This includes AML compliance technologies and tools that cover:

• Customer Due Diligence Automation
• E-KYC and Online Identity Verification
• Customer Onboarding Streamlining
• PEP and Sanctions Screening
• Ultimate Beneficial Owner (UBO) identification,
• KYB Solutions and AML/CFT Risk Management
• AML Alert Management
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT reporting
• E-Money Institutions' AML/CFT Obligations for External Reporting
• AML/CFT Incident Management
• Exception Escalation and Management
• AML/CFT Management Automation: Including automated response workflows and AI technology
• Customisable AML/CFT measures specific to onboarding and monitoring of your high ML/TF risk clients
• E-Money Institutions' AML/CFT Obligations for Record-Keeping
• Electronic Money Fraud Prevention
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to electronic money laundering and terrorist financing red flags
• Effective CRM for handling E-Money Institutions' AML requirements

 

 

E-money Institutions’ AML/CFT Audit Solutions

Having over ten years of AML/CFT compliance experience, ranging from AML/CFT framework and controls development and testing to successful AML/CFT management and issues resolution for various reporting entities, gives us the necessary expertise and qualifications to be your AML/CFT auditors.

We offer two comprehensive AML/CFT audit options to review your compliance with e-money institutions' anti-money laundering obligations. These options are:

Statutory AML/CTF Audit Option: A comprehensive review of your existing AML/CTF framework to assess whether your business complies with AML/CTF standards and applicable obligations. We independently test your compliance with both local AML/CTF obligations and specific e-money institutions' AML requirements. These often include but are not limited to:

• adherence to your AML/CTF risk assessment and operational AML/CFT procedures, including the existence of controls and mitigations to address money laundering and terrorist financing risks identified in your risk assessment
• compliance with your core AML/CFT documents, including sample testing
• your CDD requirements
• your staff vetting requirements
• your AML/CFT management processes
• your client onboarding and offboarding processes
• your EDD requirements, including source of wealth (SOW) and source of funds (SOF) requirements and application of the risk-based approach to different ML/TF risk levels

• your transaction monitoring process, covering large, complex, and unusual transactions and patterns
• your ODD processes
• your record-keeping process
• your suspicious matter reporting process (also known as "suspicious activity" or "suspicious transaction" reporting in some jurisdictions)
• your other reportable transactions process (typically covering cash and cross-border transactions)
• the way you detect and address material changes in client relationships
• your initial and ongoing screening process
• and other obligations for e-money institutions' AML/CFT compliance

Assurance Levels: Our statutory AML/CFT audit options are available as both:

• A limited assurance audit
• A reasonable assurance audit

Further Information: Please visit our AML/CFT Audit page for more information.

Internal AML/CFT Audit Option: Apart from an independent statutory audit, we also offer an internal AML audit option to prepare e-money institutions for an external audit by an independent auditor, an AML/CTF supervisor's review, or a review by another significant business stakeholder, such as a banking partner or an equity purchaser. This option is also suitable for significant business events like reorganisation or expansion.

Here, we go beyond merely meeting e-money institutions' AML requirements and focus on evaluating the effectiveness of your AML/CFT controls and ML/TF risk management processes for alignment with:

• the ML/TF risks faced by your business, including your Know Your Business (KYB) analysis
• E-money institutions' anti-money laundering compliance obligations
• your current and future goals
• your business model
• your current and prospective client inflow
• the specific AML/CFT compliance areas or requirements (this process can be tailored to address particular AML issues or compliance areas, ensuring a targeted approach to e-money institutions' anti-money laundering compliance)

We help you not only identify any gaps and weaknesses but also provide insights on how to enhance your controls and respond to these in a commercially oriented manner for more intelligent AML/CFT compliance. Please visit our Internal AML/CFT Review Solution page for more information.

 

AML/CFT audit-related solutions:

• Post-Audit Remediation Support: We assist with the implementation of post-audit remediation actions, addressing and resolving any identified AML/CFT issues.
• AML/CFT Attestation Support: Our e-money institutions' AML solutions include helping you prepare the required attestations for your AML/CFT supervisor and other stakeholders. This involves confirming that all necessary remedial actions have been completed and that adequate AML/CFT compliance measures have been put in place.
• Post-Audit Stakeholders' Liaison: We manage your communications with national AML/CTF supervisors, banks, auditors, insurers, and other stakeholders, ensuring smooth progress in reporting on the status and completion of your post-audit action plan.

 

 

Electronic Money Fraud Prevention Solutions

The e-money institutions' anti-money laundering control environment is closely related to prevention of financial crime in general, and fraud prevention in particular. Electronic money fraud prevention controls and ML/TF controls can form a unified compliance management framework tailored to the specific ML/TF and fraud risks your business is facing or is likely to face. Our Electronic Money Fraud Prevention Solutions include:

• Fraud Risk Assessment and Analysis: Conducting assessments to identify and prioritise fraud risks across your operations, allowing you to allocate resources effectively.
• Incident Response and Investigation: Creating response plans to manage fraud incidents, including guidelines for investigating, documenting, and applying corrective actions to minimise potential damage.
• Implementing Preventive Measures: Setting up checks, alerts, and controls to tackle fraud risks in the e-money and digital currency sectors, as well as drafting a set of procedures and guidelines to address fraud scenarios that you are likely to face or have faced.
• Data Analytics for Fraud Detection: Leveraging data analytics to identify focus points for your fraud prevention efforts and areas for improvement.
• Fraud Detection Technology Implementation: Choosing and helping you implement appropriate technology for real-time fraud detection.
• Fraud Awareness Training: Educating staff about fraud risks, including identity theft and impersonation.
• Further information: Please visit our Fraud Management Solutions page for more information.

Electronic money fraud response requirements: In the current risk and compliance environment, implementing fraud prevention measures is either already mandated by law in some jurisdictions or, at minimum, expected by government agencies, financial market participants, and other stakeholders.

 

 

Broader Risk & Compliance Solutions for E-money Institutions

Your AML/CFT compliance is generally more effective when the right hand knows what the left hand is doing, and at the very least, they do not interfere with each other. Incorporating your controls and procedures for compliance with the e-money institutions' AML requirements into an overall risk and compliance management framework efficiently can increase your overall risk compliance effectiveness. This is where our experience can help you. Apart from AML/CFT compliance solutions for e-money institutions, we include the following risk and compliance solutions:

• Compliance Advisory and Management: A comprehensive set of solutions for second-line compliance management, including both compliance advisory and compliance management options. Visit our Compliance Solutions page for E-money Institutions for more information.
• Third-line Compliance Assurance: A range of third-line compliance defence solutions covering compliance assurance program development and implementation, internal controls design, and controls testing solutions
• ISO Standards Compliance: A range of solutions for compliance with the International Organization for Standardization (ISO) standards, helping you prepare for ISO certification
• FATCA and CRS Compliance: A comprehensive set of solutions for complying with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements, including tax residency verification, ongoing due diligence, reporting, and record-keeping
• Privacy Law Compliance: A range of solutions covering development, implementation, and testing of data privacy controls, procedures, and tools required to meet the applicable obligations under the Privacy Act, the GDPR, ISO 27701, etc.
• Financial Licensing and Registration: A set of financial licensing solutions for e-money institutions, including preparation, licensing process management, regulator liaison, and post-licensing support in:

• Offshore financial centres and tax havens
• Australia
• Singapore
• The United Kingdom
• The United States
• New Zealand

 

 

Common Money Laundering Risks for E-money Institutions

Electronic money laundering risk types can be broadly classified into five categories:

• Product types (services offered)
• Delivery methods
• Customer types
• The institutions involved in delivering your services
• Jurisdictions of operation

Given the variety of products offered by different businesses, as well as their different business structures and operations, the examples below of money laundering risks faced by e-money institutions represent only a sample and are not exhaustive.

 

Product-Related Risks and E-money Institutions’ AML Compliance

Some of the product-related ML/TF risks relevant to e-money institutions' anti-money laundering compliance include:

• Failure to Monitor Third-Party Transactions: Lack of controls to identify and effectively investigate large, unusual, or complex transactions involving third parties (cryptocurrency exchanges, online payment platforms).
• Weak Controls for Accounts Available to Vulnerable Groups: Absence of tailored measures to effectively apply customer due diligence (CDD) for users at higher risk of exploitation, such as young users, elderly clients, or individuals on welfare payments. This includes the need to detect indicators of scams or money mule activity (mobile wallet providers, BNPL providers).
• Lack of Effective Risk-Based Onboarding for Salary Advance Products: Insufficient verification of borrowers' identity, source of income, or repayment capacity for salary advance schemes, creating vulnerabilities for fraud and misuse (salary advance Neo-banks).
• Lack of Controls for Multi-Currency Accounts: Failure to link transaction monitoring systems with KYC databases and risk assessment tools to address risks such as higher ML/TF jurisdictions, virtual-only investment vehicles, and complex international transfers (global or multi-currency e-money institutions).
• Failure to Monitor Payments Involving Unverified Third Parties: Lack of controls to scrutinise transactions involving unrelated third parties, especially where third parties fund or repay loans or facilitate crypto-to-fiat transfers (cryptocurrency exchanges, BNPL providers).
• Failure to Integrate Effective Crypto Payments Monitoring Tools: Absence of chain analysis tools or other monitoring systems to track and verify the origin and flow of crypto payments, particularly those involving external exchanges or third-party wallets (cryptocurrency exchanges, online payment platforms).
• Inadequate Due Diligence for Wealth Management Accounts: Lack of measures to verify the source of funds and beneficial ownership of high-value or complex portfolios, particularly for clients using platforms offering wealth management services (wealth management-focused e-money institutions).
• Weak Controls Over Peer-to-Peer Mobile Payments: Lack of mechanisms to monitor peer-to-peer transfers through mobile wallets increases the risk of layering illicit funds (mobile wallet providers, online payment platforms).
• Failure to Detect Structuring in Transactions: Absence of mechanisms to identify clients splitting large transfers into smaller amounts to evade reporting thresholds increases ML/TF vulnerabilities (digital remittance companies, prepaid card issuers, online payment platforms).
• Lack of Effective Risk-Based Onboarding for BNPL Products: Insufficient application of the risk-based approach in BNPL offerings when it comes to customers' income sources, repayment sources, or behavioural patterns (BNPL providers).

 

Jurisdictional Risks and E-money Institutions’ AML Compliance

Some of the jurisdictional risks relevant to electronic money laundering prevention include:

• Sanctions Screening Tools Integrating with Platforms: Failure to effectively integrate sanctions screening tools with platforms, ensure timely initial and ongoing screening, apply automated measures on identified accounts, and link ongoing due diligence protocols to flagged accounts.
• Failure to Detect and Address Transactions Involving Higher ML/TF Risk Jurisdictions: Lack of controls to monitor and investigate transactions tied to clients or entities operating in higher ML/TF risk jurisdictions (global or multi-currency e-money providers, cryptocurrency exchanges, online payment platforms).
• Inadequate Verification of Source of Wealth (SoW) and Source of Funds (SoF): Insufficient measures to evaluate SoW and SoF for clients or beneficial owners from higher ML/TF risk jurisdictions or/and jurisdictions associated with tax evasion (global or multi-currency providers, digital remittance companies).
• Weak Risk Assessment for Offshore Entities: Absence of measures to evaluate customers or beneficial owners linked to jurisdictions known for offshore banking or tax evasion risks (offshore e-money institutions, global providers).
• Failure to Tailor AML Policies Across Multiple Jurisdictions: Ineffective harmonisation of AML/CFT compliance programs for institutions operating in regions with divergent regulatory requirements, leading to gaps in compliance.
• Inadequate Risk Assessment for Capital Flight-Prone Countries: Lack of due diligence measures for transactions linked to jurisdictions known for high levels of capital flight (digital remittance companies, online payment platforms).
• Absence of Controls for Transactions Involving Organised Crime-Linked Jurisdictions: Inadequate risk management processes for transactions linked to jurisdictions associated with the production or shipment of illicit drugs or organised human trafficking (digital remittance companies, online payment platforms).

 

Delivery Method Risks and E-money Institutions’ AML Compliance

Some of the delivery method-related ML/TF risks relevant to e-money institutions' anti-money laundering compliance include:

• Remote Onboarding Without Effective EKYC Measures: Failure to implement effective systems to link client-provided documentation with verified identities during remote onboarding processes (mobile wallet providers, online payment platforms).
• Insufficient Monitoring of Transactions Involving Digital Payment Channels: Absence of specific measures to identify and assess suspicious patterns in payments processed through digital wallets, peer-to-peer platforms, or other non-traditional payment systems (cryptocurrency exchanges, online payment platforms).
• Unverified Modifications to Account Details: Insufficient controls to validate changes to account authorisations, access, or transaction limits requested remotely by customers (mobile wallet providers, prepaid card issuers).
• Unverified Remittance Corridors Between High-Risk Jurisdictions: Absence of tailored due diligence measures for corridors frequently used between high-risk jurisdictions (digital remittance companies, online payment platforms).
• Inadequate Screening for Transactions Through Informal Money Networks: Lack of mechanisms to detect remittances routed via informal value transfer systems (IVTS), such as hawala networks (mobile wallet providers, digital remittance companies).
• Failure to Identify Layering via Regional Remittance Aggregators: Regional remittance hubs may obscure the source or destination of funds, particularly in jurisdictions with inconsistent regulatory oversight (online payment platforms, digital remittance companies).
• Overreliance on Local Correspondents: Partnerships with local agents or correspondent entities in poorly regulated jurisdictions (digital remittance companies, cryptocurrency exchanges).

Customer Type Risks and E-money Institutions’ AML Compliance

Some of the customer type-related ML/TF risks relevant to electronic money laundering prevention include:

• Non-Resident Clients from Higher ML/TF Risk Jurisdictions: Insufficient due diligence measures to verify the legitimacy of funds and source of wealth for non-resident customers linked to higher ML/TF risk jurisdictions, particularly those attempting to bypass foreign currency control laws, tax laws, or AML oversight (global or multi-currency providers, cryptocurrency exchanges).
• Clients Using Nominees or Intermediaries Without Transparency: Lack of controls to identify and scrutinise accounts or transactions operated through nominees, intermediaries, or proxies to obscure beneficial ownership or evade compliance requirements (wealth management e-money institutions, digital remittance companies).
• Clients Engaged in High-Risk Industries: Failure to identify and assess customers operating in high-risk industries, such as unregulated crypto exchanges, cash-intensive businesses, or gambling (cryptocurrency exchanges, BNPL providers).
• Clients Using E-money Services for Foreign Currency Evasion: Inadequate measures to detect clients attempting to bypass foreign currency controls or sanctions through structured transactions, including cross-border transfers or multi-currency accounts (global or multi-currency providers, online payment platforms).
• Failure to Identify Linked Accounts Used for Layering: Absence of measures to detect and monitor interconnected accounts used for layering illicit funds, such as transferring funds between personal and business accounts without legitimate business activity (business-focused e-money institutions, online payment platforms).
• Complex Business Structures: Customers with layered ownership structures or trusts, particularly where beneficial ownership is unclear or unverifiable, can obscure illicit activities (wealth management e-money institutions, offshore e-money institutions).
• Overseas-Based Account Controllers and Beneficial Owners: Insufficient due diligence on customers based in higher ML/TF risk jurisdictions or controlled by beneficial owners from these jurisdictions (global or multi-currency providers, digital remittance companies).
• Politically Exposed Persons (PEPs): Insufficient due diligence or risk-based assessments for PEPs, their family members, or associates.

 

Institutional Risks and E-money Institutions’ AML Compliance

Some of the institutional ML/TF risks relevant to e-money institutions' anti-money laundering compliance include:

• Delegation of Onboarding to Third Parties Without Oversight: Failure to monitor and enforce AML/CFT compliance standards among third-party agents or affiliates conducting customer onboarding (payment service providers, mobile wallet providers).
• Engagement with Unregulated Financial Entities: Lack of controls to assess and mitigate risks when partnering with unregulated investment platforms, external payment processors, or informal networks (cryptocurrency exchanges, online payment platforms).
• Absence of Screening for Adverse Media on Partner Institutions: Inadequate mechanisms to monitor adverse media coverage related to financial crimes or compliance failures in partner institutions.
• Failure to Mitigate Risks Linked to Gatekeeper Professionals: Lack of controls to detect and address risks posed by gatekeeper professionals, such as accountants or lawyers, acting as intermediaries or using client trust accounts to facilitate transactions (wealth management e-money institutions and offshore based e-money institutions).
• Insufficient Coordination with Payment Intermediaries: Absence of measures to collaborate with payment facilitators to understand the origin of transactions and maintain robust monitoring (global or multi-currency e-money providers).
• Weak Oversight of Technology Vendors and System Providers: Lack of regular audits or compliance checks on third-party vendors offering critical technologies, such as blockchain analytics or payment processing platforms (cryptocurrency exchanges, digital remittance companies).
• Overreliance on Automated AML/CFT Systems Without Human Oversight: Dependence on automated systems without effective human oversight, escalation processes, and regular reviews can lead to undetected ML/TF risks.

 

 

Standard Anti-Money Laundering Requirements for E-money Providers

Given the variety of e-money institutions' AML requirements, this list is not exhaustive:

• Conducting customer due diligence, including appropriate KYC checks: Ensuring verification of customers’ identities, as well as identities of beneficial owners of customers that are legal entities.
• Conducting transaction monitoring: Monitoring deposits, withdrawals, and other transactions to identify and report suspicious transactions and patterns.
• ODD requirements: Conducting ongoing customer due diligence, which is generally based on the customers' ML/TF risk profiles and ML/TF risk categories, as well as changes in their activities, behaviours, or risk factors.
• Staff Vetting: Performing comprehensive background checks and ongoing vetting of staff to maintain high standards of integrity and awareness.
• Reporting Certain Non-Suspicious Transactions: Obligation to report cross-border or cash transactions over a certain threshold, as per the local AML/CFT regulations, in a timely manner. However, if the transaction is processed through a local bank or another reporting entity, reporting requirements may depend on the local AML/CFT regulatory interpretation.
• Compliance with the regulatory obligations: Including registering with your local AML/CTF supervisor, appointing an AML/CTF officer or an MLRO, answering requests for information from the police, regulators and your AML/CTF supervisor, filing an annual report and more.
• Regular Staff Training: Providing continuous training to ensure employees are aware of AML/CFT protocols and can recognise red flags.
• Timely Reporting of Suspicious Transactions: Ensuring that suspicious transactions and activities are reported to the relevant authority (either your local AML/CFT supervisor or a financial intelligence unit (FIU)) within the required deadlines.
• ML/TF Risk Assessments: Conducting regular assessments of ML/TF risks faced by your business is a part of AML risk management for e-money institutions and e-money providers.
• Independent AML/CFT Audits and E-money Institutions: Organising periodic independent reviews of the AML/CFT program, other core documents, and components of your AML/CFT framework to assess their existence, compliance, application, and, where applicable, effectiveness, depending on local AML/CFT audit guidance.
• Applying EDD measures: Conducting enhanced due diligence on certain customers and certain transaction types.
• Establishing Clear AML/CFT Policies and Procedures: Creating documented guidelines for staff to follow.
• Monitoring PEPs and Sanctioned Entities: Implementing measures for additional scrutiny of politically exposed persons and entities on sanction lists.
• Screening Against Watchlists: Regular checks of clients against domestic and international watchlists.
• Ensuring Proper Record-Keeping: Maintaining detailed and accurate records of client information and transactions in compliance with AML/CFT regulations.

 

Common E-money Institutions’ AML/CFT Issues

This is not an exhaustive list and could include:

During Customer Onboarding

• Failure to Tailor Compliance Programs to Operations: Overlooking differences in jurisdictional requirements or failing to customise AML/CTF measures for specific e-money products, delivery methods, and client types.
• Insufficient Risk Assessments: Lack of comprehensive risk assessments that consider customer types, geographic locations, and the nature of e-money services offered.
• Failure to Identify Politically Exposed Persons (PEPs): Ineffective screening to identify PEPs and their associates, leading to gaps in enhanced due diligence measures.
• Inadequate CDD: Failure to collect sufficient information to verify customers' identities, understand the nature of the business relationship, and assess beneficial ownership in complex corporate structures.
• Acceptance of Incomplete Documentation: Onboarding clients without verifying all required documentation, such as beneficial ownership details, source of wealth (SoW), and source of funds (SoF) (cryptocurrency exchanges, prepaid card issuers, online payment platforms).
• Overreliance on Third-Party Screening Tools: Lack of internal validation or complementary checks to ensure third-party screening tools effectively identify risks (mobile wallet providers, online payment platforms).

 

After Customer Onboarding

• Weak Transaction Monitoring Systems: Inadequate systems for detecting unusual or suspicious activities, such as ineffective thresholds and poorly defined monitoring scenarios.
• Failure to Maintain and Update AML Technology: Lack of ongoing updates and maintenance of AML compliance technology hinders the ability to detect evolving ML/TF patterns, particularly as typologies shift in response to regulatory advancements and enforcement trends.
• Failure to Update Customer Risk Profiles: Lack of processes to update customer information and reassess risk profiles regularly, leading to outdated assessments.
• Delayed or Non-Existent Suspicious Activity Reporting (SARs): Failing to submit SARs promptly or overlooking potentially reportable activities.
• Ineffective Cross-Border Transaction Monitoring: Insufficient scrutiny of international transactions, particularly involving higher ML/TF risk jurisdictions or unverified third parties (global or multi-currency providers, digital remittance companies).
• Inadequate Ongoing Customer Due Diligence (OCDD): Neglecting to review ongoing customer activities, failing to identify changes in behaviour, or missing new risk indicators (cryptocurrency exchanges, mobile wallet providers).
• Lack of Integration with Risk-Based Frameworks: Failure to link ongoing transaction monitoring and reviews to initial risk assessments, resulting in blind spots in detecting higher-risk activities.
• Inadequate Staff Training: Insufficient training on AML/CTF policies and procedures, resulting in weak understanding and implementation of compliance requirements.
• Deficient Governance and Oversight: Senior management not prioritising AML/CTF compliance programs, leading to resource constraints and weak institutional commitment.
• Inconsistent Screening of Sanctions Lists: Delays or gaps in sanctions list updates and application, resulting in missed identification of high-risk individuals or entities.
• Cybersecurity Weaknesses Impacting AML Measures: Insufficient cybersecurity protections expose e-money institutions to risks such as data breaches and unauthorised access to sensitive customer information, undermining the effectiveness of AML systems reliant on secure and accurate data.

 

Basic CTF Risks for E-money Institutions

The following list of Basic CTF Risks for e-money institutions is not exhaustive:

• Failure to Detect Use of Accounts for Fund Collection or Aggregation: Lack of controls to identify accounts being misused to pool small deposits from unrelated parties for onward transfer to flagged accounts (digital remittance companies, online payment platforms).
• Weak Transaction Monitoring for High-Risk Non-Profit Organisations: Insufficient oversight of accounts linked to charities or NGOs operating in higher-risk jurisdictions, which are vulnerable to misuse for terrorism financing (mobile wallet providers, digital remittance companies).
• Neglected Analysis of Cross-Border Peer-to-Peer Transactions: Lack of adequate monitoring for patterns of small, consistent cross-border payments resembling known typologies of terrorism financing (mobile wallet providers, online payment platforms).
• Unverified Wallet-to-Wallet Transfers: Absence of controls to verify transaction origins and beneficiaries in wallet-to-wallet transfers, particularly in cross-border scenarios involving high-risk jurisdictions (cryptocurrency exchanges, mobile wallet providers).
• Failure to Flag Rapid Fund Withdrawals After Large Deposits: Weak controls to detect scenarios where large deposits are immediately withdrawn or transferred to accounts in regions with known terrorism financing vulnerabilities (global or multi-currency providers, online payment platforms).
• Limited Integration of Real-Time Screening for High-Risk Jurisdictions: Lack of automated, real-time screening systems for payments involving jurisdictions with terrorism financing concerns, causing delays or missed alerts.

 

 

Common Electronic Money Fraud Risks

The following list of electronic money fraud types is not exhaustive:

• E-money Institutions and Identity Fraud: Involving identity theft or impersonation to create accounts, access systems, or conduct unauthorised transactions under false identities.
• E-money Institutions and Transaction Fraud: Fraudulent activities using manipulated, counterfeit, or stolen documentation to execute unauthorised transfers or payments.
• E-money Institutions and Insider Fraud: Employees or contractors exploiting access to systems or sensitive data for unauthorised fund transfers, data leaks, or tampering with accounts.
• E-money Institutions and Phishing Fraud: Cybercriminals targeting customers of e-money institutions through phishing emails or messages to obtain login credentials or sensitive financial information.
• E-money Institutions and Technology Fraud: Exploitation of vulnerabilities in digital platforms, including manipulation of APIs, hacking of payment gateways, or tampering with mobile wallet processes (mobile wallet providers, online payment platforms).
• E-money Institutions and BNPL Fraud: Fraudulent BNPL applications using false documentation, synthetic identities, or unverified third parties to gain unauthorised access to funds (BNPL providers).
• E-money Institutions and Digital Asset Fraud: Unauthorised access to or manipulation of digital wallets, crypto-to-fiat payment systems, or blockchain transactions for fraudulent activities (cryptocurrency exchanges, digital wallet providers).
• E-money Institutions and Third-Party Payment Fraud: Unverified or unauthorised third-party transactions, including layering of funds through unrelated intermediary accounts or payment facilitators (digital remittance companies, online payment platforms).
• E-money Institutions and Cross-Border Fraud: Fraud involving international transactions, such as layering funds through multi-jurisdictional accounts or creating fictitious entities in offshore jurisdictions (global e-money providers, digital remittance companies).
• E-money Institutions and Account Takeover Fraud: Fraud involving unauthorised access to customer accounts through compromised credentials, allowing perpetrators to make transactions or alter account settings undetected (consumer-focused platforms, mobile wallet providers).

 

 

 

Common AML/CTF Red Flags for E-money Institutions

The Financial Action Task Force (FATF) and various national AML/CTF supervisors mention the following non-exhaustive list of ML/TF red flags for e-money institutions' anti-money laundering compliance:

• Transactions Linked to High-Risk Jurisdictions: Frequent or large transfers involving jurisdictions with weak AML/CFT controls, often via digital remittance services or online payment platforms.
• Frequent Third-Party Payments: Payments routed through unrelated third parties, particularly where there is no clear economic rationale (digital remittance companies, online payment platforms).
• Inconsistent Cryptocurrency Transactions: Crypto transactions that deviate significantly in volume, frequency, or value compared to expected patterns (cryptocurrency exchanges, digital wallet providers).
• Rapid Movement of Funds Across Accounts: Quick and frequent transfers between multiple accounts or wallets, suggesting layering of illicit funds (prepaid card issuers, mobile wallet providers).
• Irregular Digital Payment Flows: Unusual transaction patterns through digital wallets, BNPL services, or peer-to-peer platforms.
• Rapid Account Turnover: High volumes of transactions in and out of accounts over short periods, often seen in accounts linked to prepaid cards or remittance platforms.
• Frequent Changes in Account Ownership or Details: Regular updates to beneficial ownership, payment authorisations, or contact details without legitimate justification (offshore e-money institutions, global payment platforms).
• Use of Multiple Digital Payment Channels: Simultaneous use of various payment methods, such as mobile wallets, prepaid cards, and online transfers, to obscure fund sources or destinations.
• Unusual Account Funding Patterns: Sudden, large deposits or withdrawals inconsistent with the customer's profile.
• Discrepancies Between Declared Wealth and Activity: Large-value transactions or account balances that do not align with a customer's stated income or wealth (wealth management-focused e-money institutions).
• Unusual Mobile Wallet Activity: Transactions via mobile wallets showing irregular patterns, such as transfers outside typical business hours or from unusual locations (mobile wallet providers, online payment platforms).
• Complex Financial Transaction Structures: Use of multiple intermediaries, accounts, or platforms to create intricate transaction flows (cryptocurrency exchanges, digital remittance companies).
• Digital Asset-Related Anomalies: Unverified transactions involving digital assets, such as large transfers between wallets without documented purpose (cryptocurrency exchanges, mobile wallet providers).
• Unjustified Cross-Border Transactions: Frequent international payments lacking clear economic or personal rationale, particularly involving offshore or multi-currency accounts.
• Use of Anonymising Tools or Services: Transactions involving privacy-enhancing technologies or currencies, such as privacy-focused cryptocurrencies or mixers, to obscure transaction details (cryptocurrency exchanges, offshore e-money institutions).
• Counter Valuation Through Under-Invoicing or Over-Invoicing of Product Flows: Use of trade-based money laundering techniques involving e-money services to obscure funds (offshore e-money institutions, global payment platforms).
• Use of Informal Remittance Networks (Hawala): Engagement with informal value transfer systems creates vulnerabilities to undetected ML/TF activities (digital remittance companies).
• Suspicious Use of Cash-Intensive Agents: Partnerships with agents or correspondents handling large cash volumes in high-risk areas without proper controls (digital remittance companies, prepaid card issuers).
• Rapid Growth in Transaction Volume or Operational Activity Without Justification: Significant increases in transaction volume or expansion without matching operational capacity raise concerns.