Anti-Money laundering (AML)

Anti-money laundering (AML) is disallowing the trading of currency acquired through illegal means and clearing them as legit by placing. Governments across the globe have placed numerous laws, regulations, processes, compliances, and law enforcement agencies into place to prevent money laundering practices.

However, even with numerous protocols in place, the UN Office on Drugs and Crime has still estimated up to $2 trillion in cash market laundering alone. The drawback is not limited to the funds obtained via illicit means but also to the growing fear about the growth of illegitimate activities, such as drug trading, financial fraud, identity theft, etc.

Introducing biometric technology into the onboarding, verification, and access processes has significantly enhanced the Anti-money laundering efforts in such spheres. 

Biometrics Make Anti-Money Laundering Compliance More Effective

Prevents Identity Fraud During the Customer Onboarding Process

The account opening process in banks and financial institutions involves a Know Your Customer (KYC) process. It is also involved in many other industries to ensure the credibility of the end user. Otherwise, the organization would fail to meet government compliances, make its system vulnerable to financial fraud, and put its existing user base at risk.

KYC involves verification of identity and proof of address. Initially, the BFSI stakeholders would send a person for physical verification. However, the verification has become simpler with the introduction of face recognition technology linked with liveness detection, geolocation, and other features.

Nowadays, the document verification process also includes Optical Character Recognition (OCR), which means it can derive the identity details from the document and fill out the form. The end user can make the changes at the end, and voila! It’s done. So, no need to fill out physical forms either. Therefore, the AML checks of accurate customer information also comply with this process. 

Moreover, face recognition technology verifies the person’s photo in the identity proof with the face biometrics of the real person at the point of picture capturing. It saves time and eliminates the risk of identity fraud.

Safeguards the User Account from Unauthorized Access

Biometric face authentication prevents unauthorized account access. The face biometrics of a person are unique. Spoofing face biometrics requires highly sophisticated technology and high expenditure. 

Earlier, PINs, passwords, and OTPs were used to access accounts. Introducing biometric authentication for account access has made access more secure and convenient. Many BFSI stakeholders already have fingerprints incorporated into the accounts.

The use of biometrics as two-factor authentication also has a similar impact. 2FA or MFA (Multi-factor Authentication) is when the end user enters two or more secure methods to access the accounts.

Initially, it included a combination of a security Q&A, password, OTP, or PIN, but now it provides face or fingerprint recognition, making it more secure and convenient. Including biometrics with liveness detection, geolocation, and other factors makes the accounts more secure. 

Must Read: Benefits of Using Biometric Multifactor Authentication

Boosts Security During Online Transactions

Money laundering involves transferring funds without leaving a trail. It is often referred to as layering. Criminals usually use cryptocurrencies and other digital trading platforms to hide the fund’s origin. 

According to a source, over $23 billion was laundered through cryptocurrencies in 2022. Likewise, the UNDOC reported that nearly $140 billion is being laundered annually via sports betting. Games like “Counter-Strike: Global Offensive” and “World of Warcraft” are vulnerable to betting. 

Moreover, the risk of identity fraud via account takeover through phishing, malware, credential theft, etc., remains a common problem. The criminal then sophisticatedly transacts the money without the account owner’s consent. Adding biometrics into account access helps to prevent such ATO attacks and even prevents them during the transaction process if they have been added. 

Refrains Account Usage by Money Mules

A student or any corporate person is often approached by a criminal to use their account in exchange for monetary benefits. The transactions seem legitimate, as the banks remain sure that the person transferring the money is the account holder. People who participate in such an activity are referred to as money mules.

However, it is a criminal offense and may have hefty implications for the bank. A 2018 BBC article suggested that this activity is actively growing. It has become a severe concern for the people and associated organizations.

But, the good news is that the inclusion of biometrics into the money-transferring mechanism can significantly reduce it. It would require biometric authentication by the person agreeing to transfer the money and would keep the cybercriminals at bay, as biometrics remain unique to a person.

If the person does participate in this money laundering scheme, the authorities will reach out to them after the bank reports a significant change in account activity. Furthermore, biometrics would also stop money mules that make fake job postings to get account access from doing account transactions and decrease the misuse of digital identity, too.


Biometrics is vital in enhancing the government’s anti-money laundering schemes. It safeguards organizations from cybercriminals and hefty fines. Simultaneously, it is protecting the digital identity of the account holder.

Including face, fingerprint, or other biometric recognition technology also prevents data breaches, account takeover attacks, and scaling up security during online transactions. In the coming years, biometrics will play an even more significant role.

Contact us to scale up your AML, PEP, and sanction security checks with our contactless biometric authentication solution, BioKYC

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