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What is Anti-Money Laundering (AML)?

Last updated: 26 October 2026

What Is Anti-Money Laundering (AML)?

Anti-money laundering (AML) is the set of laws, regulations and processes used to prevent, identify and stop illicit funds from moving through the financial system. It requires organizations to know who their customers are, monitor what they do and report suspicious activity, through measures such as customer due diligence (CDD) and know your customer (KYC) checks. AML exists to counter money laundering, the process of making the proceeds of crime look legitimate.

What laws exist in anti-money laundering?

Dedicated AML laws emerged from the 1980s, and global standards gained momentum after the Financial Action Task Force (FATF) was formed by the G7 in 1989. Examples include:

FATF also publishes its black and grey lists of jurisdictions with weak controls, which firms must factor into their risk assessments.

Who do anti-money laundering laws apply to?

AML laws apply broadly. Banks and other financial institutions are the most obvious, but lawyers, accountants, payment providers, gaming firms and insurers are also covered, and individuals and businesses that facilitate illicit transfers can be held liable.

Why do banks need to do anti-money laundering checks?

Banks must confirm that customers are who they say they are and that their funds were obtained legally. These checks are routine precautions, especially for large transactions, and do not mean a customer is under suspicion. Without them, banks face heavy fines and reputational damage.

What is an AML compliance program?

An AML compliance program is the framework a firm uses to meet its obligations. In the US, the Bank Secrecy Act requires these programs, and the USA PATRIOT Act extended the requirement to other organizations. A program typically rests on five pillars.

  1. Designating a compliance officer
  2. Creating internal policies and controls
  3. Providing continuous staff training
  4. Obtaining independent, third-party review
  5. Enforcing robust KYC and CDD processes

What are the key components of AML?

How do AML, CTF and sanctions compliance relate?

Area Focus Related entry
AML Preventing the laundering of criminal proceeds This page
CTF Stopping funds reaching terrorists Counter-terrorist financing
Sanctions compliance Avoiding dealings with sanctioned parties Sanctions screening

The three are usually run together, and they share data, such as customer information and ownership.

What are the potential AML compliance issues for financial institutions?

  • Regulations that change quickly across jurisdictions
  • Increasingly sophisticated criminals
  • Fragmented data across systems
  • Understaffed compliance teams
  • High false-positive alert rates
  • New risks from digital currencies and fintech

Many institutions benefit from SaaS financial crime prevention software to address these.

How is AI helping with anti-money laundering?

AI can analyze large volumes of data in near real time and detect patterns that rules miss. Machine learning improves detection and helps reduce false positives. Natural language processing reads unstructured sources such as news and documents, and AI can automate customer risk scoring and CDD. Agentic AI goes further by gathering evidence and preparing cases for analysts to review.

What are anti-money laundering checks?

AML checks usually involve a KYC questionnaire or identity documents, plus proof of address.

  • Identity. Passport, driving license, birth certificate or national ID card
  • Address. Driving license, utility bill, bank statement or national ID card

How big is the money laundering problem?

The United Nations Office on Drugs and Crime estimates that $800 billion to $2 trillion is laundered each year, around 2 to 5% of global GDP. Weak controls can be costly. Binance was fined $3.4 billion by FinCEN in 2023 as part of a wider settlement, and the 1MDB scandal led to major penalties for global banks.

Why should organizations use the best anti-money laundering software?

Organizations without robust controls face legal consequences and large fines. Effective AML software helps firms detect more genuine risk, cut manual work and keep up with changing rules.

How does SymphonyAI help with anti-money laundering?

SymphonyAI helps financial institutions detect and prevent money laundering across the customer lifecycle. Its transaction monitoring, the next generation of NetReveal, uses agentic AI to detect suspicious activity and support investigations through to SAR filing. AI Augment for Transaction Monitoring adds AI to existing systems, and its KYC and CDD capabilities help firms assess customer risk at onboarding and throughout the relationship. It all runs on Symphony Risk Intelligence, which delivers Always-on Compliance™.

The results show what this means in practice. Absa Group was able to reduce false positive alerts by 77%. A large European bank saw average potential effort savings of approximately 20% in Level 1 and Level 2 investigations, and expects savings of about €3.5 million per year, including a fivefold reduction in technology spending. Contact us to learn more.

FAQs

What does AML stand for?
Anti-money laundering.

What is the difference between AML and KYC?
KYC is the process of identifying and understanding a customer. AML is the broader set of controls, of which KYC is one part.

Is AML mandatory?
Yes. Regulated firms in most jurisdictions must have an AML program, and failing to do so can lead to fines and other penalties.

What is the difference between AML and CTF?
AML targets the laundering of criminal proceeds. CTF targets funds used to support terrorism. They are usually managed together.