As a business owner who works in the financial industry, if you have not heard of AML standards or know your customer and know your business, you should definitely listen up.
It is vital that we all do our part to protect the worldwide economy, especially now.
Read on to learn more about anti-money laundering (AML), why it is important, and all the ways that you can help protect your business as well as the economy of the world.
AML standards
Anti-money laundering standards (AML) are a guideline for businesses that have been laid out to detect and prevent financial criminals.
AML standards and policies are mandatory for banks and financial institutions around the world but can be used by other businesses and even individuals.
It includes doing research to determine who you are doing business with.
You collect information like the owner’s name, business license, and all parties involved in the business who could be beneficial owners.
As part of complying with AML standards, you also need to follow KYB and KYC regulations to further know who you are dealing with.
AML regulations also require banks and financial institutions to monitor their customers and report any risks of financial crime that they detect for further investigation.
KYB/KYC
KYB and KYC are a major part of AML standards — especially for banks.
They are very similar processes.
KYC stands for know your customer.
It is the process of collecting identification and other documents to determine that an individual is not a financial criminal or does not show signs of being a risk.
KYB stands for know your business.
This is the process of collecting documents and information to determine the ultimate beneficial owner and any other beneficial owners.
Research is done on the business to determine that none of the people who stand to profit from the business nor the business itself poses a risk of committing financial crime.
Why you should do your research
When you do business with a person or company, you should know exactly who you are dealing with to prevent and detect the risk of financial crimes being committed.
Crimes like money laundering, counterfeiting, security fraud, market manipulation, and terrorist financing can wreak havoc on your pocket and reputation.
If left undetected, these crimes can affect not only you, but the economy of the world.
By complying with AML standards and using KYB and KYC processes, you can help prevent damage to your own business and the safety of everyone around you.
AML standards were created to give a guideline to businesses — both in the financial field and all others.
It has become mandatory for banks and those who are in the financial industry to practice know your customer and know your business to ensure that every person or business is legitimate.
These standards protect your business and the economy of the world by showing what the business or person’s risk of committing financial crimes is.
Do your part to protect the economy today by following these guidelines today with every person and business who you deal with.
