AML
AML (Anti-Money Laundering):
Refers to laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.
Key Components:
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Transaction monitoring
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Suspicious activity reporting (SARs)
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Customer due diligence (CDD)
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Risk assessment & management
KYC (Know Your Customer):
A process used by financial institutions to verify the identity of clients to prevent fraud, identity theft, and money laundering.
Main Steps:
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Customer Identification Program (CIP): Collecting and verifying identity (e.g., passport, utility bill).
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Customer Due Diligence (CDD): Understanding customer’s activities and risk profile.
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Enhanced Due Diligence (EDD): Applied to high-risk customers or large transactions.
Together, AML & KYC help institutions:
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Comply with global financial regulations
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Mitigate risk of financial crimes
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Build trust with regulators and clients
