#QuickBiteCompliance Day 184
🏦 Nesting: The Secret Tunnels Criminals Dig in the Banking System!
Think of a big bank as a busy train station. It lets smaller banks (“partner banks”) use its tracks to send money worldwide. But what if those partner banks let their own partners hop on the train too? Now, the big bank is moving money for institutions it’s never checked—this is called nesting. While it speeds up global trade, it’s also a playground for financial criminals.
🕵️♂️ How Do Criminals Exploit Nesting?
– The Invisible Chain: A drug cartel in Country X uses Bank A (which partners with Bank B) to send dirty money. Bank B only knows Bank A, not the cartel. The cash zooms through 5 nested banks, leaving no trace of the cartel.
– Fake Fronts: A fake “charity” in Country Y opens an account at Bank C. Bank C uses Bank D’s global network. The “charity” funnels terror funds through 3 layers of banks—Bank D never sees the red flags.
– Ghost Factories: A corrupt official steals $5 million. Instead of moving it directly, they route it through nested accounts in “friendly” banks. Each bank only sees the immediate sender, not the thief.
💡 The Weak Spot:
Nesting works because banks often focus only on their direct partners, not the hidden layers. It’s like a chef trusting a food supplier, but not checking their farms for rotten ingredients.
🔧 Fixing the Leaks with Smarter Tech!
To stop nesting abuse, we need tools that:
1. Map the Full Chain: Like a detective following footprints through snow, #InclusiveRegtech traces money through all layers—not just the first one.
2. Share Intel Safely: #OpenSourceAML lets banks pool data (without exposing secrets) to spot patterns, like $20 million bouncing through 4 banks in a day.
🌍 Real Impact:
When banks collaborate and tech exposes nested networks, criminals lose their hiding spots. A $100 million fraud scheme? Shut down because the 5th bank in the chain spotted a mismatch.
📚 Learn key terms: [ACAMS Glossary](https://www.acams.org/en/resources/aml-glossary-of-terms)
🚀 Together, let’s turn nested networks from a risk into a roadmap for transparency.
#InclusiveRegtech #OpenSourceAML #100HariNulis #FollowTheMoney #BankingSecurity
