How To Pass AML And KYC Checks: History, Tips And Curious Cases

AML (Anti-Money Laundering) and KYC (Know Your Customer) are not just boring formalities, but real pillars on which the security of the entire financial system rests.

Yes, these checks may seem like a headache at times, but trust us, their importance is undeniable. In this article, we will not only look into how and why AML and KYC procedures came into being, but also share real tips on how to successfully pass them, discuss their impact on business and tell you about the funny curiosities that happen when people don’t take the checks seriously.

How It All Began: The History of AML and KYC Procedures

When we talk about AML and KYC, not only complex technical terms but also dramatic events pop up in front of us. The terrorist attacks of 11 September 2001 shocked the world, and in response, the US passed the USA PATRIOT Act, which put financial institutions on the front lines of the fight against money laundering and terrorist financing. This law was the starting point for many changes that changed the rules of the game forever.

But it all started even earlier, when FATF (Financial Action Task Force) was established in 1989, an organisation that laid the foundation for modern anti-money laundering standards. FATF set strict standards for customer identification, reporting and compliance, which became the basis for the European AMLD directives that regulate financial activity in the EU.

Why can KYC clearance be so difficult?

Passing KYC checks is like taking an exam. You can be perfectly prepared, but if your passport photo is blurry, you’re likely to be sent for a retake. Emils Kerimovs, founder and CEO of EKTICO LIMITED (UK), knows firsthand about these tests. ‘The most common mistake,’ says Emils, ‘is insufficient preparation. You’d be surprised how many failures occur simply because of poor lighting or poor camera quality! And if your name is also written differently on different documents, get ready for delays.’

How to avoid these problems? Firstly, ensure you have good lighting and make sure your device’s camera can take clear pictures. Second, pay attention to detail. Every letter in your name has meaning, especially if it lends itself easily to different transliteration options.

The impact of AML and KYC on small businesses and startups

Imagine this: you’ve launched a startup and every day counts. And here you are told that KYC verification of your business can take up to 26 days. Yes, according to a Thomson Reuters study, that’s how long it can take for this procedure. Emils Kerimovs, whose company EKTICO LIMITED (UK) works with financial technology, understands exactly how this can hit businesses. ‘For startups, time is money,’ he emphasises. – And every delay can cost you not only nerves but also real opportunities.’

But it’s not all bad. Using modern technology to automate KYC processes can significantly reduce time and cut costs. ‘This is where specialised services come to the rescue, which can simplify and speed up the process while maintaining a high level of security,’ adds Emils.

The future of AML and KYC: Technology at the centre of security

The world doesn’t stand still, and neither does technology. One of the most exciting trends is the use of blockchain technology to store and verify KYC data. Companies like Chainalysis and Elliptic are already actively using blockchain for transaction monitoring and risk management, and it really works.

However, as with any innovation, there are risks involved too. For example, the Worldcoin project, which uses iris scans to create a digital ID. It sounds futuristic, but raises questions about data security. ‘The idea is certainly impressive,’ Emils Kerimovs reflects, ‘but I wouldn’t rush to implement it until all the risks associated with transferring biometric data to private companies have been taken into account.’

More and more companies are starting to use artificial intelligence to improve AML and KYC procedures. For example, Onfido is actively implementing AI for document verification and face verification, making the process faster and more accurate. But, as they say, the devil is in the details and these technologies need to be as reliable as possible.

Curiosities: Lessons learnt that are remembered

Despite the seriousness of the topic, KYC procedures are sometimes the source of curiosities. ‘I remember a case where a client who started video verification didn’t think about the fact that the camera was capturing not only his face but also what was below. He was, to put it mildly, underdressed. This not only made our cameramen laugh, but also seriously delayed the process’

Another case occurred when a customer decided to use a photo of his cat instead of his own. Amusingly, the system failed to recognise the cat as the customer. This case brought smiles, but also reminded us that the verification process should be taken seriously.

Conclusion

AML and KYC are procedures that determine not only the security of financial transactions, but also the future of your business. They can be complicated and at times even annoying, but their importance cannot be underestimated. As technology advances, these procedures will become more integrated and convenient, but there will always be a need to prepare thoroughly for them.

Emils Kerimovs, founder and CEO of EKTICO LIMITED (UK), is confident that the future of AML and KYC promises to be bright, especially if we follow simple guidelines and utilise modern technology. So the next time you are asked to take a KYC check, be prepared and everything will go smoothly.

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