Money service businesses and AML compliance

The foreign exchange market is the biggest financial market in the world, operating 24/7 and trading more than USD $5.4 trillion per day. International businesses trade to enable cross-border transactions or hedge their operations, people exchange money for their travels or to send remittances and money traders are buying and selling currencies for profit.

With the massive amounts of money involved, there’s significant risk of money laundering, which is why forex brokers must follow strict Anti-Money Laundering (AML) regulations. While each jurisdiction is different, these brokers generally fall under the rubric of money service businesses (MSBs) and requirements often include:

  • Establishing written policies and procedures
  • Designating a person to oversee compliance
  • Following Know Your Customer (KYC) procedures
  • Monitoring watchlists
  • Recording transactions and reporting suspicious activity

Enabling new customers

While the number of people interested in currency trading creates significant opportunities for forex traders, it has also created an extremely competitive global market. Any business that wants to compete must ensure compliance, but they also need an onboarding process that is quick and seamless.

That first customer experience — the account creation process — can make or break onboarding and can determine if the person becomes a long-term customer or goes to another forex service.

Implementing a balanced onboarding approach that is secure, compliant and user-friendly is a key to success for forex brokers as they look to grow their businesses. But what practical steps are necessary to create an effective onboarding program? And what are some real-world best practices that will drive adoption and protect operations?

To answer these questions and help forex brokers improve their online customer acquisition efforts, we recently published a GlobalGateway case study that includes insights and learnings derived from working with a large, global forex organization. Expediting international onboarding for forex brokers provides insights into AML compliance for MSBs and examines how to improve onboarding experiences.