AML (Anti-Money Laundering)

AML, or Anti-Money Laundering, is a set of procedures, regulations, and standards used to stop criminals from presenting illegally obtained funds as legitimate income. It defines how organizations detect, investigate, and report activity that may indicate money laundering.

Example

Financial institutions, such as banks and credit unions, must implement AML policies and procedures to detect and report suspicious activity that could indicate money laundering. This can include customer identification and verification, transaction monitoring, and reporting large or suspicious transactions to regulators. For example, if a bank detects a customer depositing large cash amounts followed by a series of rapid transfers to multiple accounts, the AML system may flag that activity as potential money laundering. That can trigger further investigation and reporting to the appropriate authorities.