Glossary
KYB & AML Glossary
The terminology compliance, credit and risk teams use every day — defined in plain English with the regulatory context that matters.
A
- Adverse Media
- Negative news from credible sources used to identify reputational, financial-crime or ESG risk associated with a person or entity.
- AML (Anti-Money Laundering)
- Laws, regulations and controls aimed at preventing the integration of illicit funds into the financial system.
- Audit Trail
- A chronological, tamper-evident record of every screening decision, override and data source used during onboarding or monitoring.
B
- Beneficial Owner (UBO)
- The natural person(s) who ultimately own or control a legal entity, typically defined at a 25% threshold under EU AML rules.
C
- CDD (Customer Due Diligence)
- The baseline KYC/KYB process: identify the counterparty, verify identity, understand ownership and assess risk.
E
- EDD (Enhanced Due Diligence)
- A deeper investigation triggered by high-risk indicators such as PEP status, sanctioned jurisdictions or complex ownership.
K
- KYB (Know Your Business)
- Verification of a legal entity counterparty: registration, status, ownership, control, sanctions exposure and risk profile.
- KYC (Know Your Customer)
- Verification of an individual counterparty: identity, address, source of funds and risk profile.
P
- PEP (Politically Exposed Person)
- An individual holding a prominent public function (or close associate), triggering enhanced due diligence under most AML regimes.
R
- RBA (Risk-Based Approach)
- Allocating compliance effort proportional to assessed risk rather than applying uniform controls to every counterparty.
S
- Sanctions Screening
- Checking entities and individuals against domestic and international sanctions lists (OFAC, EU, OFSI, UN) at onboarding and on an ongoing basis.
- SAR (Suspicious Activity Report)
- A regulatory filing made by an obliged entity when there is suspicion of money laundering, terrorist financing or fraud.
- Source of Funds / Wealth
- Evidence of where a counterparty's funds (transaction) or wealth (accumulated assets) originate, used to test plausibility.
T
- Transaction Monitoring
- Automated, rules- and behaviour-based surveillance of transactions to detect potentially suspicious patterns.
U
- UBO Discovery
- The process of unwinding corporate ownership layers — including nominees and trusts — to identify ultimate beneficial owners.
W
- Watchlist
- A consolidated list of high-risk persons or entities (sanctioned, PEP, adverse media, internal exclusion) used during screening.
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