Understanding KYC/AML in 5 steps

In this guide, we will give you a brief description of how KYC/AML (Know Your Customer/Anti Money Laundering) works and how you can use KYC/AML in your day-to-day transactions. As an introduction, KYC/AML’s rules were officially introduced in the 1990s by the FATF (Financial Action Task Force) and is, to this day, followed by 190 countries but KYC as a concept has been around since the 1970s when financial fraud was at is height. With the financial crash of 2008 and the force majeur of Covid, KYC/AML has since evolved and grown.

What is KYC/AML? What is the difference between KYC and AML?

KYC refers to the process of identifying and verifying the identity of customers, while AML is a set of laws, regulations, and procedures designed to prevent, detect, and report money laundering activities. These two concepts are closely related and are critical to ensuring the safety and security of financial transactions.

Why KYC/AML is important

KYC/AML regulations exist to prevent financial crimes such as money laundering, terrorism financing, and fraud. These regulations ensure that financial institutions know who their customers are, what they are using their services for, and where their funds are coming from. KYC/AML helps protect financial institutions from reputational damage, legal repercussions, and financial loss.

KYC/AML requirements

KYC/AML requirements may vary depending on the jurisdiction and the type of financial institution. Generally, financial institutions are required to collect certain customer information such as name, address, date of birth, and identification documents. They are also required to monitor customer transactions for suspicious activity, report any suspicious activity to the relevant authorities, and keep records of all customer information and transactions.

KYC/AML compliance

Compliance with KYC/AML regulations is not optional, and failure to comply can result in hefty fines, legal action, and damage to reputation. Financial institutions must have robust KYC/AML policies and procedures in place and ensure that their employees are trained to identify and report suspicious activity. Regular audits and reviews are also necessary to ensure that KYC/AML policies and procedures are being followed.

Benefits of KYC/AML compliance

Compliance with KYC/AML regulations not only helps financial institutions avoid legal and reputational risks but also helps them build trust with their customers. Customers are more likely to trust financial institutions that take KYC/AML seriously and are transparent about their processes. Compliance can also help financial institutions attract more customers, as it demonstrates a commitment to financial safety and security.

KYC/AML regulations are essential for the safety and security of financial transactions. Financial institutions must comply with these regulations to avoid legal and reputational risks and build trust with their customers. Compliance with KYC/AML can also help attract more customers and increase revenue. B4Finance uses the highest technological advancements to ensure that KYC/AML structures are automated, saving time and hassle but allowing you to remain fully compliant. By following the simple KYC/AML must knows outlined in this blog post, financial institutions can ensure that they are complying with the necessary regulations and protecting themselves and their customers from financial crimes.

Sienna IM chooses B4Finance as Digital Partner

We are delighted to welcome our new client Sienna Investment Managers ! Following an extensive market consultation, B4Finance has been chosen as its digital partner. By adopting the B4 Diligence solution, Sienna Investment Managers will soon be able to automate and streamline its regulatory due diligence in terms of KYC and AML controls. We are […]

Learn More

A Beginner’s Guide to KYC/AML

In 2022, The UK’s tech flagship event took place on 13-17 June in The Queen Elizabeth II Centre in Westminster, attracting…

Learn More

Our clients' testimonials

We have set up B4 Fundraising in 5 days and were able to digitise the process from A to Z. The Support Team has shown professionalism and expertise, we are very happy about B4Finance !

B & Capital

Bernard Arock, General Councel

We are happy with B4 solutions. Since our first fundraising we have developed a real partnership with B4Finance. Second fund has started in 2022 with bigger objectives!

Altaroc

Édouard Villier, COO

Partnering with B4Finance helped us simplify a mandatory duty as the AML/KYC process by its digitalization. The API of Factiva Dow Jones is “a must” as well as the automated risk scoring.

Inpulse IM

Clément André, Investment Officer

We digitally reviewed the KYC information of 13.000 end clients through B4Finance platform, used by 1.100 Financial Advisors for this occasion. The objective of KYC update has been achieved in 12 months.

Nortia

Laurent Ovion, Director of Innovations

Thanks to B4 Diligence and B4 Fundraising modules, we digitised daily tasks regarding online subscription to our funds. We appreciate the tool’s capability to plug through API to our internal softwares.