What is Financial Crime Compliance & How to Prevent Crimes?

Financial crime compliance means an organization deploy tactics & strategies to detect, prevent & report financial crimes. Click here to know how to prevent such crimes.

Table of contents

Over the past couple of years, online financial frauds such as money laundering, identity theft, forgery, and terror financing have significantly increased. For instance, the value of money laundered in one year globally is in the range of $800 billion to $2 trillion. And that’s just one part of a pretty big picture.

This has made it indispensable for organizations to follow effective procedures for financial crime compliance. Compliance with a financial crime can help organizations stay legally operational and save their business & customers from all types of financial crimes. 

This blog discusses what compliance with a financial crime is, what it entails, and measures businesses can take to make their system more resilient.

What are Financial Crime and Compliance?

Financial crime is any activity that involves financial gain but by using illegal means. Even hiding or moving the proceeds of crime is a financial crime. And financial crime compliance is when organizations deploy tactics and strategies to detect, prevent and report these financial crimes or illegal activities.

Depending on what industry the businesses operate in or what jurisdiction applies to the business, there could be several regulations and laws they need to abide by. Here are some policies that are highly targeted toward preventing financial crimes:

Anti-Money Laundering or AML Regulations

AML regulations help businesses ensure funds generated from illegal activities don’t enter the legitimate financial system and thus prevent money laundering.

Know Your Customer (KYC)

KYC standards help organizations verify their customer’s identities and perform due diligence to ensure they pose no threat to user safety. Almost every organization performs KYC online while onboarding new consumers into their business.

Watchlist Screening

A watchlist is a list or combination of sanction or AML lists with information about criminals, launderers, and fraudsters. Businesses screen and monitor their customers against these lists and find any potentially risky customers during onboarding.

Curbing Payment Fraud

Businesses need to have end-to-end anti-fraud systems that are scalable, flexible, and robust enough to deliver a seamless customer experience while ensuring complete safety from payment fraud.

Deterring Cybercrime

Organizations take certain defensive measures to safeguard the integrity of their data and systems to prevent cybercrime.

While businesses complying with the above and other financial crime regulations become somewhat secure, there are always some lapses, failures, or errors which can leave their system open to hackers or cyber criminals. Also, the cost of complying with all the necessary regulations is quite high, making it hard for small businesses to comply with them all.

In a nutshell, completely eliminating all types of financial crime isn’t feasible. Therefore, businesses need financial crime and compliance management to effectively manage the risk.

What is Financial Crime Risk Management?

FCRM, or financial crime risk management, is a risk-based approach wherein stress is laid on balancing the risk level using the appropriate automated tools to limit the damage and occurrence of financial crime. FCRM calls for scrutiny of transactions and accounts that pose the most risk.

Here’s what an effective financial crime management program is all about:

  • Understanding the complete risk environment.
  • Creating policies that can effectively handle the risk.
  • Being aware of the nature of business and the risk it involves.
  • Educating the employees on risk policies.
  • Reporting any suspicious activities.
  • Regularly auditing and reviewing the program and making improvements.
  • Performing continuous due diligence at regular intervals.

By creating an effective financial crime risk management strategy, businesses can prepare themselves to handle any financial fraud while limiting its impact. However, as this blog focuses on online financial crimes, make sure to always implement smart, automated tools to strengthen your defense against financial crimes.

How can HyperVerge Help?

Businesses can definitely reduce the risk of financial crimes by complying with all the necessary regulations and implementing an effective crime risk management strategy. But where should businesses start? Well, that’s where HyperVerge comes in.

HyperVerge is an end-to-end identity verification service provider that helps businesses verify customer IDs while onboarding. This way, businesses can ensure only the most genuine consumers enter their system, minimizing the risk. Also, with HyperVerge, businesses can perform ongoing due diligence, keep all the information updated and thus avoid any misuse.

The best part, businesses can integrate HyperVerge into their website or application using hassle-free and codeless integration.

Do you want to know more about how HyperVerge can help you with financial crime compliance? Book a free demo now!


What is FCC?

FCC stands for Financial Crime Compliance, a set of guidelines and regulations put together to deal with and prevent financial crimes such as terrorist financing and money laundering fraud.

What are the possible financial crime solutions?

One of the best financial crime solutions is being compliant with all the regulations and guidelines set by the concerned authorities. To make the compliance process easy and for added protection, businesses can also rely on software security solutions.

What are the consequences of non-compliance with the FCC?

Non-compliance with FCC can lead to reputational damage and even massive financial penalties. You may also end up losing confidential business and customer data.

Nupura Ughade

Content Marketing Lead

With a strong background B2B tech marketing, Nupura brings a dynamic blend of creativity and expertise. She enjoys crafting engaging narratives for HyperVerge's global customer onboarding platform.

Related Blogs

A Complete Guide to Bank Statement OCR

A Complete Guide to Bank Statement OCR

Want to know about bank statement OCR? Read this blog to learn...
HyperVerge's end-to-end Identity Verification and AML solution

A Guide to Optimizing the Loan Origination Process

Discover expert strategies to streamline your loan origination process with efficient onboarding,...
HyperVerge's end-to-end Identity Verification and AML solution

Top 5 Loan Origination Software

Explore a detailed comparison of the top 5 loan origination software. Choose...