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Customer due diligence
Identify and verify customers (KYC), understand their risk, and apply enhanced due diligence to higher-risk relationships.
Glossary · AML
What is AML (Anti-Money Laundering)?
The legal framework that stops dirty money entering the system.
AML, short for Anti-Money Laundering, is the set of laws, regulations, and internal controls that regulated firms use to detect and prevent the movement of illicit funds. KYC, screening, transaction monitoring, and reporting all live inside an AML program.
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Screening
Screen customers and counterparties against sanctions, PEP, and adverse-media lists at onboarding and continuously.
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Transaction monitoring
Detect unusual patterns and behavior that may indicate laundering, and escalate alerts for investigation.
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Reporting & recordkeeping
File suspicious activity reports (SARs) where required and retain auditable records of every decision and check.
Definition
Anti-Money Laundering (AML) refers to the policies, procedures, and technologies a business is legally required to operate to stop criminals from disguising illegally obtained funds as legitimate income. A compliant AML program is risk-based and documented, with a designated compliance officer accountable for it.
Why AML matters
Money laundering underpins fraud, trafficking, sanctions evasion, and terrorism financing. Regulators impose severe penalties — multi-million-dollar fines and license loss — for AML failures. Beyond the legal obligation, a well-run AML program protects a firm's customers, banking relationships, and reputation.
How Pegalio helps
An AML program is only as strong as the operational workflow behind it. Pegalio orchestrates the onboarding side of AML: it captures the documents and data your CDD requires, enforces who can see and approve what through RBAC, automates reminders and escalations, and keeps a tamper-evident audit trail that auditors and regulators can review. It connects to your screening and monitoring vendors so evidence and decisions live in one place.
Frequently asked questions
What are the pillars of an AML program?
Most regimes expect: internal policies and controls, a designated compliance officer, ongoing training, independent testing, and risk-based customer due diligence — increasingly with a beneficial-ownership component.
Who has to comply with AML rules?
Banks, fintechs, payment firms, crypto businesses, lenders, insurers, and a growing list of non-financial businesses such as real estate and high-value dealers.
Is KYC part of AML?
Yes. KYC is the customer-identification and due-diligence component of a broader AML program.
What is a risk-based approach?
Applying due diligence proportionate to risk: lighter controls for low-risk customers, enhanced due diligence and closer monitoring for high-risk ones.