How OSINT Tools Help in the Detection and Mitigation of AML Risks?

The public sources banks use to scrutinize customers are the same ones criminals exploit to find weaknesses. OSINT is a shared battleground, and advantage goes to those who turn scattered data into decision-ready intelligence.

This two-faced nature of OSINT tools creates major challenges for regulators and compliance officers. Open Source Intelligence abbreviated as OSINT, refers to intelligence derived from publicly available sources whereas OSINT tools collect, enrich, and analyze that data.

It is referred to as a double-edged sword in AML compliance. It has the ability to both empower banks in exposing hidden networks and assist criminals in using the data on OSINT to evade regulatory expectations. For these reasons, the demand for tools, skills, and services for OSINT is growing rapidly.

The global OSINT market is projected to grow from $9.96 billion in 2024 to almost $52.40 billion by 2031, which means that the growth rate is expected to increase by 25% every year. This percentage shows the rising importance of OSINT in financial compliance and cybersecurity.

The only way businesses can ensure OSINT’s safe use is by combining it with strong risk controls. It can be done to reinforce AML defensive mechanisms while staying vigilant about how criminals can exploit publicly available data.

The Journey of OSINT From Military Origins to Modern AML

OSINT may be a buzzword in finance now, but it originated decades ago in World War II and the Cold War through agencies like BBC monitoring (est.1939) and the U.S. Foreign Broadcast Monitoring Service (est. 1941), which collect information from publicly available data. They fetch this information after tracking news reports, radio broadcasts, and journals.

Today, as more of our lives and businesses move onto digital platforms, the amount of publicly available data has exploded. Social media, websites, and online databases now provide vast troves of information that OSINT tools can fetch and analyze in real time.

In AML compliance, the role of OSINT tools is to provide companies with additional context by analyzing the public records for shell companies, tracing social networks for scams, and investigating social media for negative news. This means businesses do not have to wait to collect all the data manually.

However, where OSINT tools are making it an easy way for the regulators to track criminals, they also help launderers sharpen their weapons by collecting information about the victim.

This dynamic has turned OSINT into a battleground: who can better integrate the publicly available information, the defenders (banks and regulators) or the offenders (money launderers and fraudsters)? The answer lies in understanding the problems OSINT can solve, the challenges it presents, and how to deploy it responsibly.

The Ongoing Challenges in Open-Source Intelligence (OSINT)

Data Glut Problem

For AML experts, the major challenge is data glut, a term that is used for an extensive amount of information that professionals must go through during their process of investigation. With every share, like, comment, or mention of news, a digital trail is left that can be a valuable source of OSINT. Going through this vast amount of information manually is quite a challenging task that can result in:

• Actual alerts being missed due to large sets of data notifications.
• Increase the number of false positives, where a lot of irrelevant data triggers useless warnings.
• Poor quality suspicious activity reports (SARs) because experts are unable to review the information thoroughly.

Emerging Trend of OSINT Exploitation by Criminals

Financial crime is progressing over time as the culprits use advanced methodologies and identify loopholes through OSINT to combine old tactics like shell companies with new tools such as digital proxies and cryptocurrencies, making it harder to trace the origin of funds. For this, they use different proxies to hide their actual selves and integrate growing technologies such as cryptocurrencies that disguise the funds’ origin, making it harder to track.

A clear example of OSINT being used by criminals is during the time of the COVID-19 Pandemic, where there was a massive increase in recruitment of money mules through social media. Conventional and static monitoring systems are unable to identify these tactics of criminals, which leaves the compliance teams with nothing.

To keep up with these evolving strategies of criminals, the compliance teams must integrate modern OSINT tools that can help them get a vast trove of data in real-time.

How the OSINT Industry is Exploited by Criminals?

While OSINT platforms are essential in identifying financial risks, these are also exploited by impostors to promote illegal activities such as:

• Evading Regulatory Oversight

Imposters usually start their illegal activities by gaining knowledge about AML regulations from Open-source intelligence platforms, which helps them evade regulatory oversight. For example, they may structure transactions just below reporting thresholds to avoid triggering alerts.

• Targeting low Compliance Jurisdictions: Impostors usually target regions where AML oversight is weak. This helps them in flowing illegal funds through these areas to exploit regulatory gaps.
• Scraping Data for Vulnerabilities: Organized crime groups scrape public data to find weaknesses in financial institutions’ security. They may look for compliance officers social media activity or search for leaks to help manipulate systems.
• Unauthorized Activity Inspection: To come up with some new fraud schemes, cybercriminals collect confidential information from publicly available records and social media. This information assists criminals in creating targeted phishing attacks.

It is necessary for the AML professionals to understand the strategies by which criminals are exploiting the open-source intelligence platforms.

How OSINT Investigation Tools Augment AML Compliance?

Open Source Intelligence tools are essential for the AML efforts, enabling FIs to detect and mitigate emerging risks ahead of time. However, it is only possible if compliance teams start to integrate advanced OSINT analytics tools that contain:

• Enhanced Due Diligence

OSINT tools that assist in enhanced due diligence (EDD) by assessing the publicly available information, such as watchlists, sanction lists, Politically Exposed Persons (PEP) data, and adverse media news. By gaining information from these sources, compliance teams can do the due diligence of their potential client or entity in real-time.

• Adverse Media Screening

Continuous monitoring of global news sources, covering diverse languages and jurisdictions, helps detect negative mentions of clients globally. OSINT AI tools can automate this process, flagging potential risks like fraud investigations or sanctions violations, enabling timely interventions.

• Augment Transaction Monitoring with Context

Integrating OSINT with internal transaction monitoring systems provides contextual intelligence. For instance, for an alert indicating client involved in multiple small transactions, advanced OSINT modules can provide additional context, such as by detecting client advertising “easy money” jobs online, indicating potential money mule activity.

• Ongoing Risk Profiling

OSINT facilitates real-time updates to a client’s risk profile. Monitoring changes in PEP status, new negative news, and sanctions updates ensures that institutions can promptly adjust risk scores in response to emerging information.

Most Used OSINT Data Sources

Investigators, compliance teams and analysts use the following data sources to find out about risky transactions and criminal networks.

• Official registers and sanction lists such as OFAC, HM Treasury, OFSI consolidated list, SDN and non-SDN lists, along with regulator and court notices.
• Company records all over the world that show who owns the business and who runs it.
• News databases and event trackers that expose criminal networks and adverse stories about business entities or individuals.
• Internet infrastructure, such as DNS, website ownership (WHOIS), historical captures, and device search engines, connect entities to their online assets.
• Fact-checking tools that assist in validating claims, dates, and sources on social media and multimedia platforms.
• Public blockchains that provide clear records to trace addresses, parties involved, and the movements related to virtual assets and their service provider risks.
• Satellites and maps that help corroborate locations, facilities, and events when the physical world matters. 

Gain Access to Vast OSINT Data in Real-Time With AML Watcher

Do countless false positives drain your resources as you attempt to process the massive volume of data? Or are you using the rule-based systems that miss almost all genuine alerts, wasting your time on useless notifications? If you are a part of this pointless game, you must need an expert who can play it better.

AML Watcher, with its extensive coverage of sanctioned, watchlisted, and PEP entities, can make you win because it contains:

• AI-powered adverse media monitoring that goes beyond the simple keyword searches and offers compliance teams negative alerts about what they are searching for in real-time.
• Enhanced Due Diligence (EDD) that helps consolidate public records such as financial histories, company registries, court cases, etc., to expose criminal networks and past misconduct.
• Customized risk scoring that ensures teams are configuring alerts based on their institution’s unique risk appetite.
• Seamless integration into existing compliance workflows ensures that the alerts are centralized in one database, the platform can protect them from duplication, and it ultimately improves the decision-making process.

In short, AML Watcher acts as a force multiplier for your compliance team, empowering them to stay ahead of criminals in real-time. The platform automates complex tasks, delivers actionable insights, and is designed with an intuitive interface, so even small teams can achieve big results.