AML software for money service businesses

• Cash: cash in and cash out leaves less of a trail than an account-to-account payment.
• Cross-border corridors: transfers reach many countries, some with high sanctions or terrorist financing exposure.
• Occasional customers: many customers transact once or rarely, so there is little history to judge them against.
• Agents: transfers are often taken in through agents and partner locations the MSB has to oversee.
• Structuring: amounts can be split across transactions, days or agents to stay below the points where checks apply.
• Third parties and mules: senders and receivers acting for someone else, or recruited as money mules.

1. 1

   Register and assess risk

   Registering or licensing with the right authorities, and a written risk assessment of customers, corridors, products, channels and agents.

2. 2

   Identify and screen customers

   Customer due diligence proportionate to the risk, with sanctions and PEP screening of senders and receivers before a transfer is paid out.

3. 3

   Oversee agents

   Due diligence and screening of agents and their owners, and training and monitoring of the agent network.

4. 4

   Monitor transactions

   Monitoring for structuring, unusual corridors and activity that does not fit the customer, and re-screening when lists change.

5. 5

   Keep records and report

   Keeping the required transaction and customer records, and reporting suspicious activity to the financial intelligence unit.

FATF Recommendation 14 requires providers of money or value transfer services to be licensed or registered and monitored for anti-money laundering compliance, and requires their agents to be licensed or registered too, or listed by the provider. The wire transfer rules of Recommendation 16 apply to these transfers, alongside customer due diligence and targeted financial sanctions.

In the US, money services businesses register with FinCEN and must maintain an effective anti-money laundering program under the Bank Secrecy Act, alongside state money transmitter licensing where it applies. In Canada, money services businesses register with FINTRAC and must run a compliance program. In the UK, HMRC supervises money service businesses under the Money Laundering Regulations 2017, unless the business is supervised by the FCA. In the EU, money remittance is a payment service requiring authorisation, and currency exchange and cheque cashing offices must be licensed or registered under the EU anti-money laundering framework.

• Real-time screening: sender and receiver checks that run at the counter or in the app before the transfer is paid out.
• Matching quality: fuzzy matching across transliteration and aliases, which matters for names that travel between scripts.
• Agent screening: KYB and ownership checks for agents and partner businesses, not only for customers.
• Re-screening: the customer and agent base re-checked when lists change, with alerts only on changes.
• Explainable matches: every alert shows why it fired, so staff can clear namesakes quickly and document the decision.
• Fit with monitoring: transaction monitoring and reporting usually sit in other tools, so screening results need to feed them cleanly.