An Updated Guide To KYC/AML Compliance And KYC Regulations - 2021

24 Mar 2021

The adoption of digital KYC and Anti-money laundering process regulation is constantly evolving with time. As the world is changing fast, there are anticipations that these regulations will experience more changes in the coming days. After the advent of the global pandemic, fraudulent activities like money laundering on the cloud platform have rapidly increased.

Hence, to limit these activities, all the regulatory bodies have made updates in their KYC and AML compliance regulations for the year 2021. They have made more stringent laws to safeguard businesses from all the latent cyberattacks.

What is exactly a KYC/AML compliance and regulation?

A KYC/AML regulation is basically a framework that is intended to assist different business sectors across the globe. The main aim of this KYC and AML regulation is to combat various fraudulent activities like online money laundering, identity theft, and terrorist financing. Several regulatory bodies like the Financial Action Task Force (FATF), FINTRAC, and several others have enforced certain regulations to combat all the cybercriminals.

KYC/AML compliance and regulations across the globe

Every distinct regulatory body across the globe holds its discrete laws to curb the activities of online fraudsters. This includes distinct identity cards, driving license, passports and many more that these regulatory bodies issue. Several regulatory bodies across the globe make constant changes in their KYC compliance and AML regulations.

Mentioned below are a few KYC/AML regulation amendments that took place in the year 2021.

European Union’s 6th Anti Money Laundering (AML) directive

The sixth anti-money laundering directive was the first one amongst many directives that were launched in 2021 to prevent money laundering activities. The regulatory body made more stringent bylaws to fight identity theft, terrorist financing, and many more. Some major takeaways of this 6th AMLD directives are:

A list of 22 more technologically-advanced offences was made in the directive.
There was a rise in the economic sanction of 5 million.
The term of imprisonment increased from one year to four years for all money laundering and related activities.

Enhanced KYC regulations presented by AUSTRAC

AUSTRAC (Australian Transactions Reports and Analysis Center) updated its regulations after the pandemic crisis to curb identity theft malpractices. In the present regulation, AUSTRAC has made more stringent rules for the KYC compliances and encouraged businesses to move forward with the digital KYC verification method to secure their cloud data. It is anticipated that these regulations will transform many regulatory frameworks in the long run. Some major takeaways of AUSTRAC KYC regulation are:

It encouraged more use of scanned electronic copies of the identity records.
If a person uses an alternate identity document than the prescribed one, there will be a video call verification of the same.

As cybercriminals are becoming more technologically advanced, regulatory bodies keep updating the KYC/AML compliance and regulations. Businesses, therefore, must remain informed about these regulations to ensure compliance and increased data security. Accura Scan is a notable ID verification and KYC services provider that has developed numerous solutions to make identity scanning and KYC processes efficient. To learn more about how they operate and can help your business, reach out at connect@accurascan.com.