Anti-money laundering (AML) and identity verification: obligations and solutions for businesses

Why AML and identity verification are inseparable

The money laundering And the Terrorist financing represent a major risk for the economy and the reputation of businesses. To limit these risks, regulations require companies to put in place strict procedures for identity verification — both for individuals (KYC) and for businesses (KYB).

Identity verification is therefore the first line of defense against:

• financial fraud and corruption,
• illicit transactions and the use of false documents,
• relationships with sanctioned or high-risk entities,
• administrative and reputational sanctions related to non-compliance with AML obligations.

European regulatory framework and obligations

Businesses operating in the EU must comply with anti-money laundering directives and regulations (AMLD 4 to 6, AMLR regulation, creation of AMLA).

Main obligations:

1. Identification and verification of customers and partners
   • Collect and verify legal information and official documents (identity documents, business records, official certificates).
   • Identify beneficial owners (UBOs) for each business entity.
2. Ongoing monitoring and enhanced due diligence
   • Monitor suspicious transactions and behavior on an ongoing basis.
   • Update customer and partner information on a regular basis.
3. Risk Management
   • Assess the risk level of each client or partner (geography, sector, history, transaction volume).
   • Adapt the level of control and vigilance according to the risk.
4. Archiving and traceability
   • Maintain all evidence and verification documents for regulatory audits and inspections.

Risks for businesses

• Financial and criminal sanctions : non-compliance with AML regulations can result in significant fines.
• Reputational risk : scandals related to fraudulent transactions or illegal customers impact trust.
• Loss of licenses or authorizations : some financial activities require strict compliance to remain operational.

Technological solutions and best practices

1. Automation and digital tools

The automated solutions of KYC/KYB and AML allow you to:

• Quickly and securely verify the identity of individuals and businesses,
• Cross-reference information with national and international databases (sanctions, watch lists, official registers),
• Detect anomalies or falsified documents using AI and biometrics.

2. Ongoing monitoring

• Real-time analysis of financial flows to identify suspicious transactions.
• Automatic alerts when there is a change in customer or partner information.

3. Integration with internal workflow

• Centralize audit and compliance information in a single dashboard.
• Allow the compliance team to access all data, history, and alerts.

4. Training and governance

• Train teams on AML and KYC/KYB obligations.
• Implement internal audit and risk management protocols.

Benefits for businesses

• ✅ Regulatory compliance : reduction of the risk of sanctions and negative audits.
• ✅ Reducing fraud and financial risks : proactive identification of risk actors.
• ✅ Optimizing onboarding : faster and safer processes for customers and partners.
• ✅ Traceability and data security : verifiable evidence and structured archiving.
• ✅ Competitive advantage : image of reliability and security among investors and partners.

Conclusion

The fight against money laundering and the financing of terrorism is a strategic priority for all businesses operating in Europe. Identity verification — both for individuals and businesses — is at the heart of this system.

Businesses that combine automated processes, artificial intelligence, biometrics and continuous monitoring tools are better equipped to remain compliant, secure their transactions and limit financial and reputational risks.

For service providers like Dataleon, offering integrated KYC/KYB and AML solutions is a major asset in helping companies meet their obligations while improving the customer experience and the reliability of processes.

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