In an Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) context, it’s vital to understand not only the value instruments criminals use but also the services and products they exploit. While a value instrument—such as cash, a cryptocurrency token, or a commodity—represents a store or transfer of monetary value, a service or product is an offering or platform provided by institutions or intermediaries, which facilitates how illicit funds can be stored, moved, transformed, or concealed. This section outlines a single‐dimension taxonomy for services and products, discussing why we chose such a framework, how it differs from the approach for value instruments, and how we accounted for overlaps or multiple interpretations.
1. What Are Services & Products?
Definition:
Services and Products are the offerings and platforms provided by institutions or intermediaries that can be exploited by launderers to store, move, transform, or conceal illicit funds.
- Examples of Services: Banking (deposit, lending), legal advisory, notary services, trade finance, escrow.
- Examples of Products: Specific accounts (checking, savings, trust), credit cards, insurance policies, or specialized payment instruments.
Whereas value instruments refer to what criminals launder (e.g., cash, cryptocurrencies, securities), services & products refer to how criminals launder, i.e., the channels or commercial offerings that enable the flow, manipulation, or disguise of value. In practice, criminals exploit:
- Value instruments to hold and transfer illicit funds.
- Services & products to facilitate or structure those transfers, sometimes adding layers of complexity (e.g., setting up a business bank account, using an offshore corporate service, or purchasing a life insurance product).
2. Why “Services & Products” (Not Just “Services”)?
Some offerings are best viewed as services, such as wire transfers or trust administration, while others are products, like a specific type of loan or an insurance policy. By using both terms, we:
- Capture the full range of what financial and non-financial intermediaries provide.
- Acknowledge the difference between a recurring service (like ongoing corporate trust management) and a discrete financial product (like a fixed deposit account).
- Allow for clarity when certain offerings are clearly a product (e.g., a particular savings account) vs. a service (e.g., a broader escrow arrangement).
3. Single‐Dimension Taxonomy Overview
To keep the knowledge graph manageable, we grouped all services & products into one of the following categories. This helps limit complexity—each offering has a single “home” even though real-world usage can overlap categories.
- Payment, Transfer & Remittance Services
- Deposit & Account Services
- Lending & Credit
- Corporate, Trust & Legal Services
- Wealth & Investment
- Trade Finance & Commerce Enablement
- Insurance & Risk Management
- Crypto & Digital Asset Services
- Real Estate & Property Services
- Gambling & Gaming
- E-commerce, Marketplaces & Retail
- Professional & Advisory Services
Each category has broad definitions to accommodate regional differences and the many forms each service or product can take.
Category Definitions & Illustrations
- Payment, Transfer & Remittance Services
- Definition: Services that primarily handle the movement of funds between parties—whether domestic or cross-border.
- Examples: Wire transfers, money remittance platforms, third-party payment gateways, peer-to-peer payment systems, debit card and prepaid card services.
- Deposit & Account Services
- Definition: Offerings focused on holding funds or valuables at financial institutions, including checking/savings accounts, trust accounts, safe deposit boxes, and specialized deposit products (e.g., student or business banking).
- Examples: Business bank accounts, personal checking, pooled client accounts, escrow accounts, remote deposit capture, Islamic banking services (with deposit-based products).
- Lending & Credit
- Definition: Services and products that provide funding or credit to borrowers, often with repayment plus interest or fees.
- Examples: Personal loans, mortgages, credit cards, buy-now-pay-later, asset-based financing, factoring, pawnshop services.
- Corporate, Trust & Legal Services
- Definition: Services that form, administer, or manage legal entities or specialized structures (including trust & company service providers), as well as legal or notarial functions.
- Examples: Offshore company incorporation, corporate directorship, trustee services, notary services, professional fiduciary oversight.
- Wealth & Investment
- Definition: Services intended to manage or grow assets on behalf of clients—whether through advisory, brokerage, or structured products.
- Examples: Securities brokerage, wealth management, private banking, OTC trading (broad asset classes), investment funds, derivatives, pension management.
- Trade Finance & Commerce Enablement
- Definition: Services designed to facilitate domestic or cross-border trade.
- Examples: Letters of credit, documentary collection, shipping/logistics (freight forwarding), supply chain financing, trade facilitation platforms.
- Insurance & Risk Management
- Definition: Services offering risk coverage, such as life insurance, property/casualty policies, and reinsurance.
- Examples: Life insurance products (with cash value), reinsurance agreements, captive insurance, insurance-based investments.
- Crypto & Digital Asset Services
- Definition: Services enabling the exchange, custody, or creation of digital tokens or cryptoassets.
- Examples: Cryptocurrency exchanges, digital wallets, decentralized finance (DeFi) protocols, cross-chain bridging services, P2P crypto trading platforms.
- Real Estate & Property Services
- Definition: Services dealing with the sale, management, or custody of real or intangible property.
- Examples: Real estate agencies, property management, real estate transaction services, art custodial (if more about physical property storage than investment strategy).
- Gambling & Gaming
- Definition: Services that enable wagering or betting with real or digital funds, whether online or offline.
- Examples: Casinos, sports betting platforms, lottery, gambling payment processing.
- E-commerce, Marketplaces & Retail
- Definition: Platforms or services facilitating the buying/selling of goods or crowdfunding, often with integrated payment tools.
- Examples: Online auction sites, freelance job marketplaces, donation platforms, retail e-commerce, travel booking platforms.
- Professional & Advisory Services
- Definition: General professional offerings that aren’t purely “financial,” but can still facilitate laundering—ranging from consulting to mail/courier to virtual office.
- Examples: Legal advisory, accounting/auditing, virtual office services, mail/courier, citizenship-by-investment consulting.
4. Overlap, Ambiguities & Compromises
Single Category Constraint
Each service/product is assigned to one category to limit complexity. However, many services could plausibly fit in multiple groups—for example, Islamic Banking might mix deposit and lending products, or Over-the-Counter (OTC) Trading might be purely crypto or multi-asset. We chose whichever function seemed most central.
Broader, Not Strictly Regulatory Aligned
These categories don’t necessarily match any one regulator’s definitions—jurisdictions can treat certain activities differently. For instance, insurance-based investment products might be regulated as securities in one country but handled as standard insurance in another. By keeping definitions broad, we leave room to further specify local details when connecting these categories to techniques in the knowledge graph.
Non-Financial Services
Some included offerings (e.g., mail, courier, or virtual office services) are not regulated as financial services, yet remain relevant in AML/CFT scenarios. Criminals can abuse them to hide beneficial owners, reroute official correspondence, or maintain the illusion of local presence. From a knowledge graph perspective, capturing these potential “facilitators” is crucial.
Limited Coverage, High-Level Definitions
We deliberately did not attempt to capture every sub-variant or nuance (e.g., subdividing “Islamic financing” into murabaha vs. mudarabah). Instead, we keep definitions high-level so they’re easier to maintain and expand upon when linking to specific laundering techniques.
5. Linking Techniques and Mitigations
We do not directly connect services/products to mitigations in this framework. Instead:
- Techniques (how criminals launder money) are linked to relevant services/products they exploit.
- Techniques are also mapped to potential mitigations.
- Services and mitigations thus become indirectly connected—knowing which services criminals abuse guides which mitigations an institution might deploy.
This approach keeps the knowledge graph more scalable and modular: changes to how one technique is mitigated don’t necessarily upend the entire classification of services.
6. Why This Matters for AML/CFT
- Holistic Visibility: By mapping all relevant services/products—both strictly financial and tangential (like corporate or real estate services)—institutions and regulators get a bigger picture of how illicit funds might flow.
- Scalable Classification: A single, consistent taxonomy simplifies how these services appear in queries and visual dashboards, avoiding duplication or overshadowing.
- Adaptability: As new services or products emerge (e.g., novel DeFi protocols, advanced payment processors), they can slot into existing categories or prompt the creation of new ones.
- Regulatory & Compliance Utility: Even if certain services aren’t directly regulated in one jurisdiction, they can still be relevant from a compliance risk standpoint, enabling risk-based measures where necessary.
7. Conclusion
This taxonomy for services & products complements the classification of value instruments in an AML/CFT knowledge graph, ensuring that analysts see both the items criminals move (instruments) and the channels they exploit (services & products). By assigning each service/product to one broadly defined category—without trying to match each jurisdiction’s legal codes exactly—we attempt to strike a balance between simplicity and comprehensive coverage.
Crucially, the framework remains flexible. Each institution or regulator can refine or adapt categories (e.g., splitting out “Islamic Financing” or “Offshore Services” if local laws demand) without losing the high-level structure that makes the methodology consistent and scalable.