AML (anti-money laundering)
Also called anti-money laundering, AML/CFT.
The laws, checks and controls that stop criminals from moving or hiding illegal money through financial services.
Last updated
What it is.
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 KYC and KYB checks when customers join, sanctions screening and 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 it matters
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.
In a product build
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.
Common mistakes.
- 01
Running checks only at sign-up and never monitoring after.
- 02
Rules so broad that analysts drown in false alerts and miss real ones.
- 03
No audit trail of who reviewed an alert and why it was closed.
Read the official text.
Primary sources this definition is based on.
- 31 CFR 1010.230, Beneficial ownership requirements (eCFR)checked 2026-10-25
- 31 CFR 1020.220, Customer identification programs for banks (eCFR)checked 2026-10-25
Work it out with a tool.
Related terms.
- KYC (know your customer)The checks a regulated business runs to confirm a customer is who they say they are and to judge the risk they pose.
- KYB (know your business)Checking a business customer: that it legally exists, who owns and controls it, and how risky it is.
- Sanctions screeningChecking customers, counterparties and payments against government sanctions lists before letting money move.
- PEP (politically exposed person)Someone who holds or held a prominent public role, or a family member or close associate of one, treated as higher risk for corruption.
