KYC/AML

Extracted Attributes

• Full Name

  Know Your Customer / Anti-Money Laundering

• Core Components

  Customer Acceptance Policy (CAP), Customer Identification Policy (CIP), Transaction Monitoring, Risk Management

• Primary US Legislation

  Bank Secrecy Act (BSA), codified at 31 U.S.C. §§ 5311–5336

• Regulatory Authority (US)

  Financial Crimes Enforcement Network (FinCEN)

• Global Sanctions Fines (H1 2024)

  $3.7 million USD

• Global Sanctions Fines (H1 2025)

  $228.8 million USD

• Digital Banking Adoption (US, 2022)

  65.3% of the population

Timeline

• Binance is founded; its later legal challenges stem from inadequate KYC/AML protocols established during its early growth. (Source: Document c84b95ee-214b-4e24-b48a-09ad00fb592f)

  2017-07-01

• Digital banking usage in the U.S. reaches an estimated 65.3%, increasing the demand for remote and digital KYC verification. (Source: Web Search (Okta))

  2022-12-31

• Global sanctions-related fines for the first half of the year are recorded at $3.7 million USD. (Source: Web Search (Fenergo))

  2024-06-30

• Global sanctions-related fines for the first half of the year surge to $228.8 million USD, reflecting increased regulatory scrutiny. (Source: Web Search (Fenergo))

  2025-06-30

• Publication of legal analysis regarding the distinct roles of KYC and AML under the Bank Secrecy Act and FinCEN regulations. (Source: Web Search (KJK))

  2026-02-10

Know your customer

Know your customer or know your client (KYC) guidelines and regulations in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship with a customer. These procedures fit within the broader scope of anti-money laundering (AML) and counter terrorism financing (CTF) regulations. KYC requirements have evolved from simple identity verification into comprehensive risk management frameworks designed to prevent illicit financial activity. These procedures enable institutions to further understand their clients financial behaviour, identity, transactions, and aids in assessing exposure to money laundering and/or fraud. In addition to verifying personal or corporate identities, modern KYC standards often include customer and enhanced due-diligence for higher risk clients, ensuring compliance with global regulations. KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant and are actually who they claim to be. Banks, insurers, export creditors, and other financial institutions are increasingly required to make sure that customers provide detailed due-diligence information. Initially, these regulations were imposed only on the financial institutions, but now the non-financial industry, fintech, virtual assets dealers, and even non-profit organizations are included in regulations in many countries.

Web Search Results

• KYC and AML Compliance Guide - Fenergo

  ## The AML and KYC Screening Process The AML and KYC screening process is a critical component of regulatory compliance, designed to identify high-risk individuals or entities before they can exploit the financial system. This process involves screening customers and transactions against sanctions lists, PEP databases, and adverse media sources to detect potential involvement in money laundering, terrorism financing, or other illicit activities. [...] 1. Verify Customer Identities: KYC and AML Verification The first step in both KYC and AML compliance is customer identification and verification. Financial institutions must collect and validate key information such as name, date of birth, address, and government-issued identification. This step ensures that clients are who they claim to be and helps prevent the use of false identities to open accounts or conduct suspicious transactions. [...] ## What is KYC and AML Compliance? Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance refers to the regulatory frameworks financial institutions use to verify client identities, assess risk, monitor transactions, and detect suspicious activity. These procedures are essential for preventing financial crimes such as money laundering, terrorism financing, and sanctions violations. In the first half of 2025 alone, global sanctions-related fines soared to $228.8 million, up sharply from $3.7 million in the same period of 2024—a clear signal of intensifying regulatory scrutiny and enforcement.

• KYC (Know Your Customer) Definition, Guidelines & Regulations

  ## What is KYC? Know Your Customer is a set of procedures and guidelines that fits under a financial institution’s AML (anti-money laundering) policy. It impacts nearly all sectors of business, but it is especially relevant for financial institutions, such as banks and related sectors including investment and trading operations, insurance, and real estate. Since the pandemic and with enhancements in technology, digital banking is especially common with an expected 65.3 percent of the United States population using digital banking in 2022. This makes KYC even more imperative during the customer onboarding process, which is now regularly performed online and remotely. [...] At the heart of a KYC solution is customer identity verification. Organizations are required to perform due diligence to validate the identities of potential customers before accepting them as a customer. This includes gaining a comprehensive understanding of their financial interactions, which can also help to improve things on the customer side as the business will have a better knowledge of what services are relevant to the specific customer. Organizations that deal with financial transactions are required to have an AML (anti-money laundering) policy, and KYC falls within this scope. As a set of guidelines, the main elements of KYC include a customer acceptance policy (CAP), a customer identification policy (CIP), transaction monitoring and reporting, and risk management.

• KYC and AML Regulatory Requirements Applicable to U.S. ...

  KYC and AML are closely related but distinct concepts. KYC focuses on identifying and understanding customers at onboarding and throughout the customer relationship. AML encompasses broader institutional obligations, including transaction monitoring, reporting, recordkeeping, internal controls and cooperation with law enforcement. Together, these requirements are designed to protect the integrity of the U.S. financial system and to ensure transparency regarding the ownership and movement of funds. ## Statutory and Regulatory Framework ### Bank Secrecy Act The BSA, codified primarily at 31 U.S.C. §§ 5311–5336, establishes the core AML obligations applicable to U.S. financial institutions. The statute authorizes the U.S. Department of the Treasury to require financial institutions to: [...] Maintain records with a high degree of usefulness in criminal, tax and regulatory investigations File reports on certain transactions Implement AML programs reasonably designed to prevent misuse of the financial system ### Implementing Regulations FinCEN’s implementing regulations are set forth at 31 C.F.R. Chapter X. These regulations define covered financial institutions, prescribe AML program requirements, establish customer due diligence rule and mandate reporting obligations such as Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs).

• AML vs KYC: Working Together to Prevent Crime - Glossary - LSEG

  | Feature | AML (Anti-Money Laundering) | KYC (Know Your Customer) | --- | Definition | A broad system to prevent illegal activities through financial channels. | A process of verifying customer identity before business onboarding. | | Scope | Includes risk assessment, transaction monitoring, illicit activity flagging. | Focuses specifically on identity and intent verification. | | Regulatory Basis | FATF Recommendations, Financial Conduct Authority (FCA), MLR 2017. | Often forms part of AML regulation requirements like MLR and FATF. | | Frequency | Continuous through business relationship lifecycle. | Primarily conducted during customer onboarding but includes updates. | [...] ### What are the stages of AML in banking? AML is a broad framework to combat financial crimes, including money laundering and terrorist financing, while KYC focuses specifically on verifying customer identity and intent during onboarding and maintaining due diligence throughout the business relationship. ### Is KYC part of AML compliance? Yes, KYC is a crucial component of AML compliance. It lays the foundation by verifying customer identity, helping organisations assess risk and implement effective AML strategies. ### What is the AML KYC process? [...] ### What are AML KYC remediation procedures? Remediation involves identifying and correcting gaps in existing AML/KYC operations, such as updating outdated customer data, resolving flagged transactions, and aligning processes to meet regulatory requirements. ### What’s the role of AI in KYC and AML? AI enhances KYC and AML processes by automating identity verification, transaction monitoring, and sanctions screening. It reduces manual errors, identifies anomalies faster, and improves the detection of suspicious activities, saving time and resources. ### Are there certifications for AML KYC professionals?

• KYC vs. AML: What are the Differences? - Entrust

  Collect customer information. This includes names, addresses, dates of birth, and copies of government-issued identification for individuals. For businesses, that might be registration documents and beneficial ownership details. Verify identities. Compare collected data against trusted records and other databases to ensure accuracy and KYC AML verification. Screen against watch lists. Cross-check data against global sanctions and PEP lists to identify potential high-risk individuals or businesses. Conduct risk assessments. Using the collected data, assign each customer a risk level. Higher-risk individuals or businesses may require deeper dives into financial backgrounds and documentation of proof of income. [...] Financial institutions use KYC and AML to ensure compliance with laws and industry regulations to prevent crimes like fraud, money laundering, and terrorism financing. Credit institutions apply KYC and AML verification processes to vet potential borrowers, assess their credit risk, and prevent loan fraud and other financial crimes. Insurance companies use KYC and AML screening to verify that policyholders are who they say they are, prevent false claims, and make sure payouts go to the legal beneficiaries. E-money institutions that offer digital payment services verify users and ensure they are using electronic funds for legal purposes only. [...] This article breaks down the relationship between KYC and AML, how they’re applied across various industries, and the processes, requirements, and best practices for each. ## Key takeaways KYC and AML are both initiatives designed to prevent financial crimes. KYC focuses on identity verification and is a subset of larger AML efforts to prevent money laundering, fraud, and more. Industries like finance, e-commerce, and real estate use KYC and AML to vet customers and monitor their behavior and transactions. Following established processes and best practices can help businesses comply with all applicable legal requirements and industry regulations regarding KYC and AML. ## What are KYC and AML?