AML Fraud Detection

Banks Need a New Approach to Fight Money Laundering

Cesar Soliman - 03.23.2022


Regulated financial service companies have a legal responsibility to monitor customer activity for potential aml fraud detection and financial crime, such as money laundering. Know Your Customer (KYC) guidelines are part of a broad set of guidelines that ensure financial service companies know the identity of their customers and how they use their accounts.

The main objective of KYC guidelines is to prevent criminals using financial service companies for money laundering—they will form one part of the anti-money laundering (AML fraud detection) strategy. This may sound like a barrage of three-letter acronyms, but there are some specific areas that banks and other financial service companies can focus on, including:

•     Customer acceptance procedures

•     Customer identification procedures

•     Transaction monitoring

•     Risk management

All these procedures help to protect customers from fraud and the financial service institution itself from unwittingly being used to launder the proceeds of crime. With consumer buying behavior shifting to digital more, the risk of fraud exponentially increases. Fraud is increasingly front and center. Even with the right tools—whether that is in digital fraud protection, Trust and Safety thresholds for payments, augmented authentication, and/or tokenized transactions—the rampant use of digital channels has created an increased risk. This is where Authentication and KYC play an important and ever-increasing role in ensuring that consumers are fully protected, while not compromising a frictionless consumer experience.

Many of the procedures designed to protect consumers are closely connected to and most visible at the point of customer interaction, so it’s no surprise that Teleperformance has become closely involved in this activity. Banks can detect and fight crime by knowing their customer and their behavioral patterns better, so it’s up to the partners that are designing customer service processes to help in this mission. It is also our responsibility to augment and protect with tools for our employees that are servicing our clients and subsequently provide the best in class products and capabilities to drive fraud prevention and fight crime.


The problem with many traditional approaches to the detection of money laundering is that it was hard to detect patterns inside millions of transactions. This led to many false positives (95% of positives are incorrect in some banks) where genuine customers find their account locked because they transferred a large amount for a valid reason, such as purchasing a home. On the flip side, criminals knew that the detection measures were crude and so it was fairly easy to fly under the radar.

Now we can apply artificial intelligence and machine learning to the customer service processes, so all transactions are monitored, even self-service ones. This allows for much smarter pattern recognition and the ability to identify and stop criminal activity much earlier. It also allows the bank to focus on the behavior of each individual customer, so those with a genuine reason to regularly move larger amounts from one account to another do not find they are endlessly blocked from their account. In addition, the criminals that launder money by washing small amounts regularly will find that their activities will be noticed—the bank becomes much more aware of how each individual customer behaves and what is unusual.

This is just one example of how greater insight into customer behavior can help financial service companies. Having a strong KYC process helps to prevent fraud and money laundering, but it can also lead to more positive outcomes such as predicting when a customer might need a particular service and offering it to them proactively. This, coupled with augmented authentication tools, protects the customer and creates a seamless customer experience. When you truly get to know your customer, you build your service around their needs and with that, the opportunities to improve the experience are endless.

Click here for more information on the Teleperformance experience of working with banking customer service and financial service companies - including our expertise at applying smart KYC and AML fraud detection processes.

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