A Review of KYC and AML

There are increasing global requirements for all businesses involved in financial transactions to conform to specific guidelines and requirements to help protect the industry.

An Overview of KYC and AML

KYC and AML are two different but similar types of ways that businesses in the financial industry provide protection to their customers as well as the industry. KYC or Know Your Client policies are specific steps used to verify the identity of the customer from the original application for an account through to each online or in-person transaction.

AML is anti-money laundering procedures, regulations, and laws that are used throughout the banking and financial industry. While KYC practices are often developed specifically by an institution to comply with regulations, AML policies were developed by the Financial Action Task Force (FATF) in 1989. The FATF was a global team tapped to develop a consistent set of regulations to use throughout the world.

Currently, there are more than two hundred different jurisdictions around the world that follow the FATF regulations and policies. This accounts for 39 countries and the European Commission and the Gulf Cooperation Council.

Compliance and Monitoring

Technology plays a factor in both KYC and AML across the globe. Through the use of scanning systems, financial institutes can meet and exceed all aspects of KYC requirements, which are also essential to comply with AML regulations.

Software systems on the market are intuitive to use, offer real-time verification of documents as well as live participation for full compliance. With 100% OCR accuracy, these systems make online banking possible while reducing the risks to both customers as well as financial institutions.

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