How KYC and AML Work for International Companies: A Practical Guide

Companies with global operations face complex regulatory demands, especially with regard to knowing their customers and preventing financial crime. Two essential pillars here are KYC (Know Your Customer) and AML (Anti-Money Laundering). While often used together, they serve distinct yet complementary roles in protecting businesses and the financial system.

What are KYC and AML?

• KYC (Know Your Customer): a process to verify the identity, legitimacy, and risk of clients, whether individuals or companies.

• AML (Anti-Money Laundering): a broader framework of policies and procedures to detect, prevent and report money laundering, terrorist financing and related illicit activities.

KYC is the gatekeeper and AML ensures ongoing vigilance, making them both fundamental for international businesses.

The 4 Essential Stages of the KYC/AML Process

KYC/AML compliance commonly follows these five steps:

1. Customer Identification ProgramCollect key data, such as name, address, ID numbers (e.g. passport, tax ID) plus company documents such as Certificate of Incorporation and beneficial owner information. 

2. Customer Due DiligenceUnderstand the customer’s business nature, risk profile, transaction volume, and predictability to assess risk.

3. Enhanced Due DiligenceFor higher-risk clients, like those from high-risk countries or with opaque ownership structures, due diligence involves deeper investigation (source of funds review, background checks, interviews, additional questions).

4. Ongoing Monitoring:KYC/AML doesn’t stop at onboarding. Companies must continuously monitor transactions, update customer records, and watch for suspicious patterns.

   
   
   
   

AML in Practice

AML programs complement KYC by:

• Screening against sanctions, politically exposed persons, watchlists;

• Monitoring transactions for suspicious or atypical behavior;

• Reporting unusual activity to authorities;

• Maintaining records for compliance and audits;

• Conducting internal training for staff and regular audits.

Global Variations and Regulatory Expectations

Though the core principles are universal, KYC/AML regulations vary across jurisdictions and sectors. International standards, like those from the Financial Action Task Force (FATF), guide countries, but local authorities adjust details to align with domestic laws.

Companies must:

• Understand local KYC/AML laws where they operate;

• Adjust onboarding and monitoring accordingly;

• Navigate differences in acceptable documentation, risk limits, and data storage requirements.

  
  

Key Benefits for International Companies;

• Mitigates legal and regulatory risk, avoiding fines, investigations and loss of access to banking services;

• Protects reputation, maintaining integrity and stakeholder trust;

• Enables global operations, because banks, platforms and counterparties expect strong KYC/AML;

• Improves efficiency by reducing manual effort and exposure to fraud with robust systems.

Why Ancilia Can Help

At Ancilia, we design and implement KYC/AML programs that align with international regulations. We support clients with compliance-ready structures, tools, and ongoing guidance to ensure legitimacy and banking access worldwide.