Security is the key point of every business. Organizations employ all the best practices, preventing a data breach and financial fraud. These include KYC and AML. Learn more about these services from our presentation!

1. AML and KYC Compliance:
Why is it so Crucial?

2. Why do we use AML and KYC?
Security is the key point of every business. Organizations
employ all the best practices, preventing a data breach and
financial fraud.
Thus, in order to protect services, AML and KYC compliance
are prevalent in the industry. But why are they so vital, and
what are the differences? Let’s dig in.

3. What is the AML?
Anti-money laundering is also known as AML. It is a group of
policies and procedures implemented by financial institutions
and authorities to identify and counter illegal activities carried
out by criminals. These Illicit actions occur outside of the
normal range of economic and financial spheres.

4. What is meant by KYC?
Know Your Customer is also known as KYC. It is a way to
confirm a customer’s personality.
According to KYC, it is required to include all important
documents, and then you have permission to be a member and
use this financial platform. It is necessary to ensure that
companies are doing business according to applicable laws.

5. Key elements of a KYC compliance
framework
KYC compliance includes detailed procedures such as:
1. Identity verification
Company needs to make sure that a potential user is not on any of the
Sanction Lists (such as the OFAC or Interpol Lists).
2. Customer profiling
It is a way of creating portraits of your customers that are based on factual
information.
3. Customer identity
Financial institutions collect your records including birth certificates, proof
of address, identity, and income papers.

6. Key elements of a KYC compliance
framework
4. Customer Due Diligence (CDD)
It’s collecting all available customer data and monitoring it to ensure all
activity is consistent with recorded client information.
5. Enhanced Due Diligence (EDD)
If the user can be identified as a part of the high-risk group, then intense
monitoring and deeper investigative research are needed.

7. The latest options to perform KYC
One of the newest solutions implemented in KYC is biometric identity
verification. Let’s take a closer look at the most widely spread options,
integrated to perform KYC:
• Fingerprint scanners;
• Facial recognition procedures;
• Voice verification.

8. How is the KYC process related to
AML?
A company’s AML compliance program consists of several processes. And
the KYC process takes the major place. It is a method used to verify
identity and form a customer’s risk profile.
AML compliance program includes the KYC process as a first level to
determine a customer’s identity and watch their transactions. KYC
procedures are the major elements in an institution’s AML policy.

9. What is the difference between
KYC, AML?
KYC is the regulatory method, which can confirm a customer’s identity by
monitoring his or her personal data and financial transactions.
AML system is a group of policies and procedures implemented by financial
institutions and authorities to identify and counter illegal activities carried out by
criminals.

10. In conclusion
AML and KYC require significant administrative effort and the analysis of
large amounts of transaction data. To avoid human error, many firms
automate AML with a range of smart technology options.
By now, you know about KYC and AML policies, and how they differ. So,
you should keep in mind everything that we have mentioned above.