National security, economic stability, protecting your reputation and right to do business – these are the 9 reasons why we need microfinance AML regulations and compliance
From entire countries to global industries and down to your individual business, we all have a vested interest in ensuring Anti Money-Laundering (AML) compliance.
Regardless if it’s being requested by a regulator or not, AML regulations are there to, in the end, protect your customers, economic stability and your microfinance business’ reputation, as well as the integrity of the financial instruments you use.
Here are the 9 reasons why we need microfinance AML…
9 Reasons Why We Need MicroFinance AML Regulations & Compliance
As the Global Community & Industries
The global community of countries came together to develop the rules for AML compliance and Combating the Financing of Terrorism (CFT), for every specific reasons…
1. To Prevent Financial Crimes
AML measures are vital in detecting and preventing financial crimes on a global scale, including money laundering, terrorism financing, and other illicit financial activities.
By equipping businesses and countries with the tools to identify suspicious activities, we can disrupt criminal networks, terrorist, their funding and their operations.
2. To Safeguard Financial Stability
Money laundering can undermine the stability of financial institutions and systems. AML frameworks help in maintaining confidence in financial markets by ensuring they are not used for illicit purposes.
See the huge economic costs of non-compliance.
3. To Promote International Trade and Investment
Simply put, people don’t want to risk investing their money in places that are not 100% secure. And, if some countries can’t guarantee that your hard-earned investments won’t be used by criminal networks, they won’t invest.
A robust AML regime enhances the credibility of all financial institutions and entire markets, encouraging foreign investment and facilitating international trade throughout the entire world.
See how to get sanction screening in Africa.
As Countries and Economic Regions
As lawmakers, countries play a major role in seeing that all businesses comply, but it is also in the entire country’s best interest to get compliant…
4. To Ensure National Security
AML measures protect a country's security by preventing terrorist financing and other security threats. See how $131bn in illicit financial flows were discovered in just 3 Southern African countries.
By better tracking financial transactions with AML measures, authorities can thwart potential security breaches.
5. To Achieve & Maintain Economic Stability
Money laundering can distort asset and property prices, contributing to economic instability. AML policies help in maintaining economic balance by ensuring transparency in financial transactions.
Read about South Africa’s greylisting deadline, the economic impact thereof, the massive penalties and fines involved and how South Africa has warned of more impending AML penalties coming soon.
6. To Protect Reputations
Compliance with AML standards enhances a country's reputation on the international stage, promoting it as a secure and stable place for investment.
Read all about Namibia’s greylisting, and how it’s also responded with compliance fines.
You As an Individual Microfinance Business
It’s about more than just putting the measures in place to meet compliance standards, it’s about protecting your right and ability to do business…
7. To Build Trust and a Good Reputation
For individual businesses, especially in the financial sector, implementing AML measures builds trust with customers and partners by demonstrating a commitment to legal and ethical practices.
See how to achieve AML compliance as a microlender.
8 To Reduce Operational Risks
By identifying and mitigating risks related to money laundering, businesses can protect themselves from potential losses and legal challenges.
See how to save up to 90% on AML compliance in Africa.
9. To Build Integrity and Have a Competitive Advantage
A strong AML program can provide a competitive advantage by assuring investors and customers of the business’s integrity and stability, fostering a safer and more reliable market environment.
Discover what you need to know about AML in microfinance and how to get microfinance AML compliant with world-class sanction screening in Africa.
