These two terms, ‘Know Your Customer and Anti-Money Laundering (KYC and AML)’ is no more new, especially when we think of various financial sectors working around the world. In fact, recently they have received so much of limelight, that every now a then a new law or rule can be noticed, which intends to make this procedure error-free.
However, understanding of these terms in an exact manner is still an issue for most. Thence, to make sure no more misperception or muddles are faced, below we have explained the same in detail.
What is KYC?
A shortening of ‘Know Your Customer’ is a Customer Identification Process, which involves steps and process which assist in determining the true identity of the customer (beneficial ownership of accounts).
This process also helps an organization in listing down various other facts like the source of income/funds, nature of customer business, and more, which in return assist financial organizations like the bank in calculating far-sighted risks. These are few steps which help in saving various financial institutions and stay secured from criminal elements resulting money laundering.
What is AML?
An acronym for ‘anti-money laundering’ is a term used by financial and legal industries to describe the legal control that involves financial/economic organization and other delimited entities to avoid, perceive and report money laundering activates.
