{"head":{"title":"What Is AML (Anti-Money Laundering)? Definition | OceanLab","description":"AML is the set of laws, checks and controls that stop criminals moving illegal money through financial services. What an AML program covers and mistakes.","canonical":"https://oceanlab.in/glossary/aml"},"crumbs":[{"name":"Home","path":"/"},{"name":"Glossary","path":"/glossary"},{"name":"AML","path":"/glossary/aml"}],"slug":"aml","term":"AML (anti-money laundering)","aka":["anti-money laundering","AML/CFT"],"category":"Payments and fintech","short":"The laws, checks and controls that stop criminals from moving or hiding illegal money through financial services.","body":[["Money laundering is making money from crime look legitimate. AML rules require regulated firms, such as banks, money transmitters, payment companies and many crypto businesses, to run a program that finds and reports it. Most programs also cover terrorist financing, which is why you will see AML/CFT."],["An AML program usually includes ",{"href":"/glossary/kyc","text":"KYC"}," and ",{"href":"/glossary/kyb","text":"KYB"}," checks when customers join, ",{"href":"/glossary/sanctions-screening","text":"sanctions screening"}," and ",{"href":"/glossary/pep","text":"PEP"}," checks, ongoing transaction monitoring, reporting of suspicious activity to the authorities, record keeping, training and independent testing. In the US the program requirement comes from the Bank Secrecy Act, 31 U.S.C. 5318(h), and FinCEN's rules in 31 CFR Chapter X."]],"why":["For a fintech product, AML is not a back-office add-on. It decides the onboarding flow, which data you collect, which third-party checks you call, how you monitor transactions and how cases are reviewed. Gaps are a common reason for fines and for banking partners dropping a fintech."],"example":["A remittance app flags a customer who receives dozens of small transfers from unrelated people and sends the total abroad the same day. The monitoring rule opens a case, an analyst reviews it with the customer's KYC file, and the team files a report."],"inBuild":["In a payments or banking build, AML shows up as onboarding checks, a rules engine, an alert queue for analysts and an audit trail of every decision, all scoped with the client's compliance team."],"mistakes":[["Running checks only at sign-up and never monitoring after."],["Rules so broad that analysts drown in false alerts and miss real ones."],["No audit trail of who reviewed an alert and why it was closed."]],"related":[{"href":"/glossary/kyc","label":"KYC (know your customer)","detail":"The checks a regulated business runs to confirm a customer is who they say they are and to judge the risk they pose."},{"href":"/glossary/kyb","label":"KYB (know your business)","detail":"Checking a business customer: that it legally exists, who owns and controls it, and how risky it is."},{"href":"/glossary/sanctions-screening","label":"Sanctions screening","detail":"Checking customers, counterparties and payments against government sanctions lists before letting money move."},{"href":"/glossary/pep","label":"PEP (politically exposed person)","detail":"Someone who holds or held a prominent public role, or a family member or close associate of one, treated as higher risk for corruption."}],"tools":[{"href":"/tools/kyc-cost-per-check","label":"KYC cost per check","detail":"Free tool"},{"href":"/tools/fintech-app-cost","label":"Fintech app cost","detail":"Free tool"}],"links":[{"href":"/build/aml-fraud-monitoring","label":"Building AML and fraud monitoring","detail":"Rules, alerts and case review."},{"href":"/software/banking","label":"Software for banking","detail":"Banking systems, controls and regulation."},{"href":"/software/regtech","label":"Software for regtech","detail":"Compliance and financial crime systems."},{"href":"/software/payments","label":"Software for payments","detail":"Payment systems and the compliance work they bring."}],"sources":[{"title":"31 CFR 1010.230, Beneficial ownership requirements (eCFR)","url":"https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-B/section-1010.230","checkedAt":"2026-10-25"},{"title":"31 CFR 1020.220, Customer identification programs for banks (eCFR)","url":"https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1020/subpart-B/section-1020.220","checkedAt":"2026-10-25"}],"legal":true,"updatedAt":"2026-10-25"}