AML/CFT Compliance Management Solutions for Money Transmitters

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CTF), and fraud prevention solutions tailored to US money transmitters’ AML/CFT compliance and aligned with the requirements of the Bank Secrecy Act (BSA), USA Patriot Act of 2001, Anti-Money Laundering Act (AMLA) of 2020, Financial Crimes Enforcement Network (FinCEN) requirements for money remittance providers, including specific red flags related to the US remittance providers’ money laundering, terrorist financing, fraud and other types of financial crime.

We have designed our AML solutions to help you navigate the complexities of the BSA/AML regulations for money transmitters in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of the US money transmitters’ anti-money laundering obligations, 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 money transmitters
• Any money transmitters’ fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, money transmitters’ 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 money transmitters
• 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 money transmitters’ anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

What Types of Money Transmitters Do We Support?

Focusing on money laundering (ML), terrorism financing (TF) mitigation, and fraud prevention, our money transmitters’ anti-money laundering solutions cover the following types of money remittance service providers and institutions that are deemed to be AML/CTF reporting entities (aka “covered entities”):

• International Money Transfer Services
• Domestic Money Transfer Services
• Online Money Remittance Platforms
• Mobile Money Operators
• Currency Exchange Services Involving Remittances
• Payment Service Providers Involved in Remittance Transactions
• Money Transfer Agents
• Prepaid Card Issuers
• E-wallet Service Providers
• Other money remittance providers that are subject to FinCEN regulations for money transmitters

This page is about our AML solutions in the United States. For AML/CFT services for this industry in other jurisdictions, you can visit the following pages:

• Money remitters’ AML/CFT solutions in Australia
• Money remitters’ AML/CFT solutions in the United Kingdom
• Money remitters’ AML/CFT solutions in Singapore
• Money transmitters’ AML/CFT solutions in New Zealand
• Money remitters’ AML/CFT solutions in the European Union

 

How Is the US Money Remittance Industry Regulated?  

Money transmitters’ AML obligations in the United States are governed by the Bank Secrecy Act (BSA) and the USA Patriot Act, with supervision by the Financial Crimes Enforcement Network (FinCEN). These regulations aim to combat US remittance providers’ money laundering activities and mitigate US money transmitters’ fraud risks.

 

US Money Transmitters’ AML Advisory and Support

Our AML/CFT advisory services for the USA-based money transmitters include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the BSA/AML regulations for money transmitters under 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.
• Detailed advice on dealing with financial fraud and financial crime: Tailored to US money transmitters’ fraud environment, risk management practices, and stakeholders' expectations and obligations (banks, regulators, insurers, shareholders, etc.). We advise on measures, controls, and processes for detecting, preventing, and responding to different types of fraud, scams, and other types of financial crime relevant to US money transmitters.
• Banking relationships advice: Advising money remittance 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 money remittance providers 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 improved compliance with US money transmitters’ 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 US money transmitters’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help money remittance providers 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 US money transmitters' 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 US money transmitters’ AML/CFT compliance requirements:

• Customized AML/CFT Training Solutions: Specialized AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the BSA/AML regulations for money transmitters, 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 BSA/AML regulations for money transmitters, AML regulations, and guidance
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to US remittance providers’ 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 US-based money transfer providers
• The US remittance providers’ money laundering risks, common money laundering schemes and terrorist financing methods
• 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 US remittance providers’ money laundering, fraud risks, and terrorism financing
• Suspicious activity reporting for the US money transmitters
• The implementation of customer identification programs and KYC procedures for US money transmitters
• Improvements in clients' onboarding and transaction monitoring procedures
• Strategic and operational ML/TF risk management
• AML/CTF specifics of cross-border money remittance
• And other obligations relevant to the BSA/AML regulations for money transmitters

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world US remittance providers’ money laundering, terrorist financing, and common US money transmitters’ fraud scenarios, as well as specific challenges related to the US money transmitters’ 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 money remittance providers and other businesses subject to AML/CFT regulations.

 

 

Comprehensive AML/CFT Managed Solution for US Money Transmitters

Our US money transmitters’ AML/CFT compliance management solutions include but are not limited to:

• AML/CFT Compliance Leadership: We act as your dedicated Money Laundering Reporting Officers or (MLROs) (aka “AML/CFT compliance officers”) and as compliance managers, fully managing AML/CFT compliance and handling the US money transmitters’ anti-money laundering obligations for your business.
• US Money Transmitters’ 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 BSA/AML regulations for money transmitters, 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 BSA/AML regulations for money transmitters in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and US Money Transmitters’ 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 BSA/AML regulations for money transmitters 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 US remittance providers’ money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to the BSA/AML regulations for money transmitters
• ongoing progress against your organization-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 US money transmitters.

• US Money Transmitters’ AML and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with US money transmitters’ 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 BSA/AML regulations for money transmitters for statutory reporting.
• US Money Transmitters’ 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 US Money Transmitters’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with the BSA/AML regulations for money transmitters. 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 US Money Transmitters’ AML/CFT Compliance

US money transmitters’ AML/CFT Framework Development: Covering specific BSA/AML regulations for money transmitters and obligations under national AML/CTF laws and regulations, and any applicable AML/CFT guidance, as they relate to:

• Your risk appetite
• Existing human and technology resources
• Your business structure
• Your history of AML/CFT compliance
• Current and future business goals

We develop, enhance, and implement a set of core policies, manuals, programs, and procedures for effective US money transmitters’ AML/CFT compliance management, including the following:

• AML/CTF Risk Assessments: Focused on the BSA/AML regulations for money transmitters 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 most designated service providers/AML/CFT reporting entities and industry-specific ML/TF risks faced by money transmitters 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 US money transmitters’ 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 US money transmitters’ 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.

• US money transmitters’ AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of US money transmitters’ 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 BSA/AML regulations for money transmitters 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 US money transmitters’ anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with the BSA/AML regulations for money transmitters, 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 US money transmitters’ BSA/AML/CFT solution is focused 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 US BSA/AML laws, US money transmitters’ 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, US money transmitters’ 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 US money transmitters’ solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient US money transmitters’ 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
• US Money Transmitters’ Fraud Prevention
• 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
• US Money Transmitters’ AML/CFT Obligations for External Reporting
• US Money Transmitters’ AML/CFT Obligations for Record-Keeping
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to the US remittance providers’ money laundering and terrorist financing red flags
• Effective CRM for Handling BSA/AML Regulations for Money Transmitters

 

 

US Money Transmitters’ 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 US money transmitters’ 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 U.S. AML/CFT obligations and specific BSA/AML regulations for money transmitters. 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 US money transmitters’ 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 money remittance providers 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 BSA/AML regulations for money transmitters 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
• US money transmitters’ 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 US money transmitters’ 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 smarter 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 US money transmitters’ 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.

 

Comprehensive US Money Transmitters’ Fraud Prevention Solutions

The US money transmitters’ anti-money laundering control environment is closely related to prevention of financial crime in general and fraud prevention in particular. US money transmitters’ 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 US Money Transmitters’ 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 money remittance sector, 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.

US Money Transmitters’ 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 US Money Transfer Providers

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 BSA/AML regulations for money transmitters 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 US money transfer providers, 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 Money Transmitters 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 the 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 money transfer and remittance providers, including preparation, licensing process management, regulator liaison, and post-licensing support in:

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

 

FinCEN Regulations for Money Transmitters and Different ML/TF Risk Types

The US remittance providers’ money laundering risk types can be broadly classified into five categories:

Most of these will arise out of five broad categories:

• Product types (services offered)
• Delivery methods
• Customer types
• The institutions you work with when delivering your services
• Jurisdiction of operations

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 money remittance providers in the United States represent only a sample and are not exhaustive.

 

Product-Related Risks and US Money Transmitters’ AML Compliance

Some of the product-related ML/TF risks relevant to US money transmitters’ anti-money laundering compliance include:

• Failure to Detect Structuring in Remittance Transactions: Absence of mechanisms to identify clients splitting large transfers into smaller amounts to evade reporting thresholds increases ML/TF vulnerabilities. (Relevant to all remittance providers)
• Lack of Verification for Anonymously Funded Remittance Channels: Insufficient measures to verify the source of funds for cash-based or prepaid remittance services create opportunities for money laundering and obfuscation of illicit funds. (Relevant to Prepaid Card Issuers, Mobile Money Operators, and Money Transfer Agents)
• Inadequate Monitoring of High-Value Transactions: Failure to assess ML/TF risks associated with unusually large or complex remittance transactions, particularly those inconsistent with client profiles, increases exposure to misuse by money launderers. (Relevant to International Money Transfer Services and Online Money Remittance Platforms)
• Weak Controls Over Peer-to-Peer Mobile Payments: Lack of mechanisms to monitor peer-to-peer remittance transfers through mobile wallets increases the risk of layering illicit funds. (Relevant to Mobile Money Operators and E-Wallet Service Providers)
• Vulnerabilities in Currency Exchange Linked to Remittance Services: Insufficient monitoring of currency conversions tied to remittance transactions, such as those involving high-risk jurisdictions or irregular exchange patterns, can obscure the origin of funds, facilitating layering. (Relevant to Currency Exchange Services Involving Remittances and Payment Service Providers)

 

Jurisdictional Risks and US Money Transmitters’ AML Compliance

Some of the jurisdictional risks relevant to US money transmitters’ money laundering prevention include:

• Exposure to Risks in High-Corruption Jurisdictions: Failure to implement mechanisms to identify and address risks associated with transactions involving jurisdictions with elevated levels of bribery and corruption increases ML/TF vulnerabilities.
• 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 creates exposure to illicit financial flows.
• Absence of Controls for Transactions Involving Organized Crime-Linked Jurisdictions: Insufficient screening of transactions tied to jurisdictions with high levels of organized crime activity may allow money remittance providers to process illicit funds.
• Failure to Mitigate Risks Related to Tax Evasion Jurisdictions: Weak or absent controls for detecting transactions involving jurisdictions associated with tax evasion increase the risk of facilitating illegal financial activities.
• Insufficient Screening for Conflict Zone Proximity: Transactions involving jurisdictions located in or adjacent to conflict zones, or known for supporting terrorism, require enhanced monitoring to identify and address ML/TF risks.
• Lack of Controls for Illicit Drug and Human Trafficking Hotspots: Inadequate risk management processes for remittances linked to jurisdictions associated with the production or shipment of illicit drugs or organized human trafficking increase the potential for facilitating criminal enterprises.
• Failure to Address Jurisdictional Risks in Complex Cross-Border Transactions: Insufficient mechanisms to escalate and address complex or high-value international transactions, including inadequate processes for understanding the transaction's purpose and conducting effective Enhanced Due Diligence (EDD), increases exposure to ML/TF risks.

 

Delivery Method Risks and US Money Transmitters’ AML Compliance

Some of the delivery method-related ML/TF risks relevant to US money transmitters’ anti-money laundering compliance include:

• Unverified Remittance Corridors Between High-Risk Jurisdictions: Absence of tailored due diligence measures for corridors frequently used between high-risk jurisdictions (e.g., conflict zones or tax havens) increases exposure to illicit financial flows. (Relevant for International Money Transfer Services and Currency Exchange Services)
• 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, creates risks when servicing jurisdictions with weaker AML enforcement. Specific red flags include unusual transaction patterns or mismatched sender-receiver details. (Relevant for Mobile Money Operators and Money Transfer Agents)
• 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. Examples include repeated small transactions routed through multiple intermediaries. (Relevant for Online Remittance Platforms and E-Wallet Service Providers)
• Overreliance on Local Correspondents in Unregulated Regions: Partnerships with local agents or correspondent entities in poorly regulated jurisdictions increase ML/TF vulnerabilities due to weak AML/CFT oversight at the local level. Regular due diligence and monitoring are critical. (Relevant for Money Transfer Agents and Payment Service Providers)
• Insufficient ML/TF Controls for Online Identity Verification: Failure to implement robust mechanisms, such as biometric authentication or verification of self-reported information, linking identification documents to the actual identity or domicile of clients during remote onboarding increases risks of fraud and illicit fund transfers. (Relevant for Online Money Remittance Platforms and E-Wallet Service Providers)

 

Customer Type Risks and Money Transmitters’ AML Compliance

Some of the customer type-related ML/TF risks relevant to money laundering prevention for remittance providers stem from failing to assess ML/TF risk levels accurately and implement effective initial and ongoing due diligence measures for the following types of customers:

• Cash-Intensive Businesses: Customers from cash-intensive sectors, such as retail or hospitality.
• Complex Business Structures: Customers with layered ownership structures or trusts, particularly where beneficial ownership is unclear or unverifiable.
• High-Risk Industries and Occupations: Customers involved in sectors like gambling, virtual assets, or other money transmitters.
• High-Net-Worth Individuals (HNWIs): Wealthy clients with complex financial arrangements and unverifiable sources.
• Not-for-Profit Organizations (NPOs): Unregulated or unsupervised NPOs operating in high-risk regions.
• Overseas-Based Customers: Customers based in higher ML/TF risk jurisdictions or controlled by beneficial owners based in these jurisdictions.
• Politically Exposed Persons (PEPs)
• Trusts and Other Legal Arrangements:  trusts or other legal structures without mechanisms to identify and verify the ultimate beneficial owners can obscure the origin of funds, increasing ML/TF vulnerabilities.
• Customers Relying on New Technologies: Businesses heavily utilizing online trading platforms or virtual assets, particularly those operating on unregulated exchanges or offering pseudonymous transactions.

Institutional Risks and US Money Transmitters’ AML Compliance

Some of the institutional risks relevant to US money transmitters’ anti-money laundering compliance include:

• Lack of Effective Controls for Institutions with AML/CFT Deficiencies: Failure to apply effective due diligence measures when dealing with institutions previously identified for AML/CFT deficiencies, such as those subject to public warnings or fines, increases exposure to ML/TF risks.
• Absence of Screening for Adverse Media on Partner Institutions: Inadequate mechanisms to monitor for adverse media coverage related to financial crimes or compliance failures in partner institutions heightens reputational and regulatory risks. Regular checks for reports on fraud, sanctions violations, or other financial crimes are essential.
• Insufficient Oversight of Transactions Involving Other Money Transmitters: Weak monitoring of transactions facilitated through other money transmitters, such as nested remittance services or cross-border fund flows in jurisdictions with ineffective AML/CFT frameworks, allows for fund layering and obscuring of transaction origins.
• Failure to Mitigate Risks Linked to Gatekeeper Professionals: Absence of effective mechanisms to detect and address ML/TF risks posed by gatekeeper professionals, such as accountants, law firms, or real estate agents, who may act as intermediaries or use client trust accounts to facilitate transactions, increases the likelihood of money remittance services being exploited for illicit financial activities.

 

Standard Anti-Money Laundering Requirements for Money Transmitters

Given the variety of FinCEN regulations for money transmitters, 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 money transmitters.
• Independent AML/CFT Audits: Organizing 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 US Money Transmitters’ AML/CFT Issues

The following list is not exhaustive:

During Customer Onboarding

• Incomplete or inaccurate collection of customer identification information.
• Usage of inadequate eKYC processes that contain gaps, do not meet AML/CFT regulations, or both.
• Absence of mechanisms for linking documents provided with customers’ identities (leads to weaker controls for identity theft and ).
• Insufficient background checks to identify politically exposed persons (PEPs).
• Inadequate assessment of the customer's source of funds and wealth.
• Lack of proper risk categorisation of customers based on their profile.
• Non-compliance with enhanced due diligence requirements for high ML/TF risk customers.
• Overlooking red flags indicative of potential money laundering.

After Customer Onboarding

• Inadequate monitoring of customer transactions for suspicious activities.
• Failure to update and review customer information regularly.
• Insufficient tracking of changes in customer transaction patterns.
• Not identifying transactions that deviate from the customer’s profile.
• Ineffective systems to flag large, complex, and unusual transactions and patterns.
• Lack of continuous risk reassessment of existing customers.
• Delayed or non-reporting of suspicious transactions to authorities.

 

Basic TF Risks for Money Transmitters

The following list of basic TF risks for money remittance providers is not exhaustive:

• Small Structured Transactions: Use of multiple low-value remittances to avoid detection thresholds, creating a risk of aggregated funds being channelled toward terrorist activities.
• Unverified Source of Funds and Suspicious Purpose of Transfers: Failure to verify the source of funds for high-risk transactions or identify patterns suggesting suspicious purposes increases exposure to terrorism financing risks, particularly in informal or high-risk transfers.
• Use of Unregulated or Informal Remittance Channels: Engagement with unregulated money transmitters, agents, or informal value transfer systems (e.g., hawala networks) increases exposure to undetected ML/TF activities.
• Weak Oversight of Remittance Agents in High-Risk Jurisdictions: Failure to monitor and apply risk-based controls to agents operating in poorly regulated or high-risk jurisdictions facilitates the movement of funds for terrorist purposes.

 

 

Common Money Transmitters’ Fraud Risks

The following categories of money transmitters’ fraud are not exhaustive:

• Money Remittance and Identity Fraud: Fraudsters use stolen or falsified identities to initiate transfers, receive funds, or bypass customer verification measures, exposing remittance providers to reputational and regulatory risks.
• Money Remittance and Transaction Fraud: Manipulated or falsified transaction records are used to process unauthorised remittances, creating the appearance of legitimate activity while diverting funds to illicit actors.
• Money Remittance and Insider Fraud: Employees or agents exploit their access to remittance systems to create unauthorised transactions, alter recipient details, or misappropriate funds, leveraging weak internal controls.
• Money Remittance and Agent Fraud: Fraud committed by local or regional agents, such as inflating fees, creating fake transactions, or diverting customer funds, particularly in jurisdictions with weak oversight.
• Money Remittance and Phishing Fraud: Fraudsters use phishing schemes targeting customers or agents to steal login credentials, enabling unauthorised account access and fund transfers.
• Money Remittance and Technology Fraud: Exploitation of platform vulnerabilities, such as hacking or malware attacks, to redirect remittance transactions, steal customer data, or disrupt operations.
• Money Remittance and Cross-Border Fraud: Use of international remittance networks to obscure the origin or destination of funds, exploit jurisdictional loopholes, or layer illicit transactions across multiple countries.
• Money Remittance and Digital Asset Fraud: Fraud involving cryptocurrencies or tokenised assets, such as unauthorised wallet access, manipulation of blockchain data, or use of digital assets to obscure fund origins in remittance transactions.
• Money Remittance and Agent Mismanagement: Instances where agents fail to verify customer identities, maintain accurate records, or properly adhere to AML/CTF protocols, enabling fraudulent or illicit transactions.
• Money Remittance and Unregulated Channels: Engagement with informal or unregulated remittance channels, such as hawala networks, to bypass scrutiny, creating vulnerabilities to fraud and money laundering.
• Money Remittance and False Documentation Fraud: Submission of falsified identification, proof of address, or business credentials to initiate remittances under false pretences.

 

 

Common AML/CTF Red Flags for Money Transmitters

The Financial Action Task Force (FATF) and various national AML/CTF supervisors, law enforcement agencies, and industry participants outline the following ML/TF red flags relevant to money transmitters’ anti-money laundering compliance. This is not an exhaustive list:

• Frequent Small Transactions Below Reporting Thresholds: Structured transactions designed to avoid detection, particularly when they aggregate into significant amounts or involve multiple senders and recipients.
• Transactions Involving High-Risk Jurisdictions: Remittances originating from or destined for countries with poor AML/CFT controls, high levels of corruption, or known involvement in organised crime or terrorism.
• Use of Multiple Remittance Channels: Customers utilising various money remittance providers or informal networks (e.g., hawala) to obscure the source and destination of funds.
• Unverified or Inconsistent Customer Information: Customers providing incomplete or falsified identification documents, or discrepancies between declared and observed sources of funds.
• Rapid Movement of Funds Through Accounts: Customers conducting quick in-and-out transactions, often across multiple jurisdictions, without a clear business or personal rationale.
• Unusual Transaction Patterns or Amounts: Transactions inconsistent with the customer’s financial profile, business activities, or declared purpose.
• Transactions with No Apparent Economic or Legal Purpose: Transfers lacking a clear or legitimate explanation, such as payments to unrelated third parties.
• Funds Routed Through Multiple Layers or Accounts: Use of intermediary accounts, layering funds, or involvement of unrelated entities to obscure the transaction trail.
• Frequent Changes in Beneficiaries or Recipients: Sudden or unexplained changes to the designated recipient of funds, particularly in high-risk transactions.
• Unexplained Use of Third Parties: Payments made on behalf of customers by unrelated individuals or entities without a clear justification.
• Recurring Transactions to the Same Beneficiary: Multiple customers sending funds to a single individual or entity without a legitimate connection or business relationship.
• Suspicious Use of Cash-Intensive Agents: Agents or correspondents handling disproportionately high volumes of cash transactions, particularly in high-risk areas.
• Unusual Customer Behaviour: Customers unwilling to provide identification, provide excessive documentation, or exhibit nervousness during transactions.
• Transactions Linked to Sanctioned or High-Risk Entities: Transfers involving individuals or entities flagged in sanctions lists, or jurisdictions under sanctions or international scrutiny.
• Rapid Growth in Transaction Volume or Unusual Operational Activity: Significant increases in transaction volume, locations served, or agents without corresponding operational capacity or justification.
• Lack of effective customer onboarding procedures and enhanced due diligence procedures when it comes to facilitating transactions that bring a degree of anonymity, such as payments by prepaid cards or cryptocurrency.
• Lack of effective AML/CFT procedures to address transaction settlement conducted through different settlement methods, such as balancing of accounts through alternative channels such as cash couriers, and settling of accounts through trade rather than transfer.
• Counter valuation through under-invoicing or Over-invoicing of product flows between import and/or export businesses, etc.
• Lack of effective AML/CFT procedures regarding understanding the customers' sources of wealth (SOW) or sources of funds (SOF) for high-value customers, high-risk customers or dealing with uncharacteristic transactions that are not in keeping with a customer's usual activity.