itsual AML / KYC Basics
Overview
Anti-money laundering (AML) and know-your-customer (KYC) programs prevent the financial system from being used for illicit finance. They combine identification, risk rating, ongoing monitoring, and reporting duties.
When to Use
- Customer onboarding and CDD/EDD design
- Periodic KYC refresh programs
- Transaction monitoring alert concepts
- SAR/STR escalation awareness
- AML training and culture support
Core Practices
- Identify and verify customers (and beneficial owners where required)
- Risk-rate customers and apply proportionate due diligence
- Monitor transactions and behavior for unusual patterns
- Escalate and report suspicious activity through defined channels
- Screen against sanctions and prohibited parties as required
- Retain records for mandated periods
Principles
- Risk-based approach — not identical effort for every customer
- Tip-offs and tipping-off prohibitions matter operationally
- Quality of KYC data drives monitoring effectiveness
- Compliance and business share responsibility for outcomes
Verification
- CDD/EDD requirements are defined by risk tier
- Escalation path for suspicious activity is clear
- Sanctions screening coverage is defined and owned