Meet AML Compliance
with Online Identity Verification
What is AML?
Anti-money laundering (AML) describes the legal controls that require financial institutions and other regulated entities to prevent, detect, and report money laundering activities. Anti-money laundering (AML) refers to a set of procedures, laws and regulations designed to stop the practice of generating income through illegal actions. Though anti-money laundering laws cover a relatively limited number of transactions and criminal behaviors, their implications are far-reaching.
Who is Impacted?
AML regulations require financial institutions issuing credit or allowing customers to open accounts to complete due-diligence procedures to ensure they are not aiding in money laundering activities. It’s up to financial institutions that issue credit or allow customers to open accounts to investigate customers to ensure they are not taking part in a money laundering scheme. They must verify where large sums of money originated, monitor suspicious activities and report material cash transactions.
AML Compliance and Your Online Identity Verification Process
Online identity verification is the starting point for AML compliance in a digital world. If the EU’s Fourth Anti-Money Laundering Directive is any indication, governing bodies are becoming more comfortable with, and some would suggest even encouraging of, the use of digital customer identity verification.
The European Commission recognizes,
“Accurate identification and verification of data of natural and legal persons is essential for fighting money laundering or terrorist financing. Latest technical developments in the digitalization of transactions and payments enable a secure remote or electronic identification.”
According to Gov.UK, organizations must perform due diligence by carrying out checks on their business and customers, and maintain records to help prevent money laundering. Customer due diligence means taking steps to identify your customers and checking they are who they say they are. In practice, this means obtaining a customer’s name, photograph on an official document which confirms their identity, and residential address and date of birth. The best way to do this is to ask for a government issued document like a passport, along with utility bills, bank statements and other official documents.
AML and KYC go hand in hand when it comes to the role of online identity verification.
To help meet your AML compliance obligations, look for a solution that offers these features and benefits:
- Convenience for customers
- A high level of assurance that your customers are who they say they are
- Mobile and web-enabled, leveraging on-device technology, biometrics (such as facial recognition with liveness detection), compliant machine learning, and identity experts
- Extra layer of assurance through document verification to help establish proof of address by extracting data from bank statements or utility bills