Do you know AML and KYC?


Complying with AML and KYC laws protect the operators while the players can enjoy a nice online casino experience. The world of online gaming needs to follow strict regulations that ensure the safety of everyone involved. Besides industry regulators and national rules that apply to online bets, two key elements need to be considered: AML and KYC.

Anti-money laundering (AML) is a set of detailed regulations from governments around the world. This includes a list of compliance actions that ensure all financial activity is within a legal frame. KYC, Know Your Customer is one of these actions.
Any iGaming company that wants to establish itself and grow, needs to understand deeply the importance of legal compliance and all the related actions. In this article, we’ll tell you all about AML, how it differs from KYC and how they relate to each other in a regulatory process.

The differences between AML and KYC

AML is an umbrella term that involves a complete range of processes and measures that a company needs to implement to comply with legal regulations.
On the other hand, KYC is one of the many components of AML: it refers to all the actions and channels a company implements to verify the identity of its customers and oversee their financial behavior.
Know your Customer activities are set into place as one of the different strategies firms need to implement to comply with AML regulations. KYC helps prevent money laundering by helping companies decide whether do business with a customer.

AML Compliance programs

One of the major challenges criminals face is how to spend their gains: it is not as easy at is it might seem. For instance, one of AML requirements is that businesses create a report whenever a customer makes large cash deposits.
This means that criminals need to find a way to enter their ill-gotten money into the financial system and “clean it” or legitimize it.
As criminal activity has evolved, so have AML laws to keep up-to-date. One clear example is how the USA Patriot Act implemented some important changes to the reach of AML laws. In addition, compliance teams from firms all around the world are required to periodically review their AML compliance programs as well their risk management strategies.

What is a AML program?

A successful AML program should include some features that ensure the right compliance with regulations:
• KYC implementation throughout the customer lifecycle: since the onboarding stage.
• Overseeing every financial transaction
• Reporting any suspicious activities to the proper regulators
• Detailed record of the process that can be presented during an audit
• Constant training to keep employees updated
• Updating of policies to ensure compliance

KYC And Customer Due Diligence

One of the many aspects of KYC procedures is Customer Due Diligence (CDD), which is the second step in a KYC program. However, it is important to note that in some cases both terms are used interchangeably. The first step during a KYC program is collecting all relevant information about a customer during the onboarding process. This stage is usually called New Customer Information. For instance, when a new user joins an online Casino and creates a profile providing certain information.
Then, CDD comes in during the second stage, where the firm verifies the identity of the new player to ensure they are not using fake identification or pretending to be somebody else.
There are several ways to perform identity verification. For online casinos, one of the most important ones is to verify a watchlist to ensure that the new possible customer isn’t a PEP or politically exposed person or someone on a sanctions list.
CDD is to run a risk assessment to analyze and determine how likely the new user is to get involved in money laundering. To get this analysis some key factors are considered, including the type of account, amount of money deposited, and country of origin.

What do KYC processes involve?

The right KYC process prevents money laundering activities by following some specific stages or phases:
1. Verify the new customer’s identity
2. Screen the customer in prohibited or sanctioned laws
3. Study the customer profile to determine whether they are high risk or not
4. Constantly monitoring the financial activity to ensure the risk profile hasn’t changed.

Advanced data analysis software and artificial intelligence can offer an effective way to screen new customers, validate their information and monitor their financial activity.

Compliance Innovation to help KYC

While implementing strict and reliable KYC controls and processes, it is a challenge to ensure the best customer experience for everyone. This has become more complicated over the past years with new elements such as FinTechs.
It is a fact that FinTech innovations offer important benefits as well as disadvantages to the KYC process. On one hand, most of them accelerate the process to provide a better experience for users. However, this also means less time to run the due diligence process.
On the other hand, these innovations also change the expectations of customers around onboarding processes: making it harder for companies to implement an efficient KYC program while reducing the onboarding time.
For instance, online casinos that send several automatic requests for information from their customers, are more likely to be perceived as offering a negative experience. Especially when compared with those with less strict policies for KYC.


The iGaming industry’s incredible growth in profit and popularity has also increased the concern of illegal financial activities and cybercrime like money laundering by international criminals. Laws and regulations are set by financial institutions, regulators, and gaming operators to prevent such activities and there is a strong focus on AML and KYC to secure player account safety and security compliance. It’s more important than ever that each operator and its employees understand the importance of their roles in preventing brand damage, protecting customers, and undertaking training from experts.

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