AML (Anti-Money Laundering)

AML, or Anti-Money Laundering, is a set of procedures, regulations, and standards designed to prevent criminals from disguising illegally obtained funds as legitimate income, like a vigilant guardian ensuring the purity of a kingdom's wealth and thwarting the schemes of those who seek to exploit the financial system for nefarious purposes.

Example

Financial institutions, such as banks and credit unions, are required to implement AML policies and procedures to detect and report suspicious activities that might indicate money laundering. This may include customer identification and verification, transaction monitoring, and reporting large or suspicious transactions to regulatory authorities. For instance, if a bank detects a customer depositing large sums of cash followed by a series of rapid transfers to various accounts, the AML system may flag these activities as potentially indicative of money laundering, prompting further investigation and reporting to the appropriate authorities.