Advanced techniques in Anti-Money Laundering (AML), Know Your Customer (KYC), and real-time identity resolution

Money laundering has been around for as long as money. The earliest accounts date back to ancient Greece and Rome. However, money laundering as we know it today began to evolve to mask the criminal enterprise it often conceals only hundreds of years ago. In 1931, an individual became involved in the creation of casinos in Havana, Cuba, to launder operations for the then-legal income from illegal gambling in the United States. It was almost fifty years before the popularity of casino gambling in Nevada, the casinos’ visibility in Las Vegas, and the newfound capability to monitor the funds flowing in and out of the casinos began to attract the attention of regulatory authorities. In 1985, the U.S. Treasury Department adopted regulations requiring casinos to file Currency Transaction Reports on cash wagers of more than $10,000. By the late 1980s, casino corporations were being cited for millions of dollars of currency transaction violations. Shortly thereafter, Congress enacted anti-money laundering legislation (Colladon & Remondi, 2017; Lin et al., 2020; Campedelli & D’Ignazio, 2021).

Developments in the casino industry set the stage for a more involved U.S. regulatory framework that expanded into industries beyond gaming because it was felt that just going after the proceeds of crime would not be enough to stem the flow of money into Florida properties and businesses. In 1991, Congress passed the Bank Secrecy Act, which required financial institutions to create effective anti-money laundering programs — including the filing of currency transaction reports for cash transactions over $10,000, as well as reports of suspicious activity inside or outside the bank, whenever a bank employee sees or knows something that doesn’t look right. The Act was expanded into a second stage in 1996 (Weber & Studer, 2016; Zhdanova & Moulin, 2020).