What do AML and KYC mean and what is their relationship?

AML y KYC

You have probably come across the acronym AML before, which stands for Anti-Money Laundering. But how does this term relate to digital identity? It is a legal framework encompassing different procedures to prevent financial crime.

The AML5 Directive and the eIDAS Trust Services Regulation establish the regulatory framework for KYC/AML processes in Europe. This creates the regulatory framework that enables the adoption of online and secure video identification for new service contracting and account opening processes.

The AML6 Directive was recently passed, which further develops penalities and controls for the online identity verification process. It aims to unify European anti-money laundering regulations, to better define the liability of obliged parties (KYC processes) and the evolution of corporate liability.

For this reason, at Facephi, and as suppliers of tools to carry out this type of process securely and remotely, we ensure that our solutions comply with the regulations in force.

 

And what about KYC? Is it another regulation?

The answer is no, it is a concept that refers to the process that verifies a person’s identity. However, this term does not refer to any particular process, so it is important for the supplier to indicate what kind of process it carries out to ensure its truthfulness. KYC, which stands for Know Your Customer, can be understood as a procedure aimed at verifying a user’s identity. KYC has several steps, which may be more or less strict depending on the sector. They usually have this in common:

  • Checking to see if a person is on an international list of Politically Exposed Persons
  • Risk analysis according to their activity
  • Monitoring and tracking their transactions

 

Therefore, while AML is a legislative regulation, KYC is not. At Facephi, and through facial, fingerprint, periocular or behavioural biometrics, we carry out the corresponding steps so that digital identity verification is secure, correct and efficient. And as well as complying with regulations, we incorporate an extra layer of security, applying our own processes to ensure that biometrics are responsible.