Money laundering remains one of the biggest global financial crimes, and digital identity is the new weapon in the fight against it. Banks and fintechs are adopting AI-powered KYC (Know Your Customer) and AML (Anti-Money Laundering) systems.
Challenges:
– Deepfake IDs can bypass weak verification systems.
– Cross-border identity validation is inconsistent.
– Criminals exploit DeFi and crypto wallets.
Legal Frameworks:
– FATF (Financial Action Task Force) global AML standards.
– India’s Prevention of Money Laundering Act (PMLA).
– Europe’s updated AMLD regulations.
The Tech Angle:
– AI-driven verification using facial recognition and liveness detection.
– Blockchain-based digital IDs for secure transactions.
Conclusion:
The battle against money laundering is shifting toward advanced digital identity verification. But with rising fraud sophistication, regulators and banks must constantly adapt to stay ahead.