Solutions | AML Sanctions Screening

AML Guide for the Fintech Industry

The rapid growth of the fintech sector presents new opportunities, but it also opens doors for potential money laundering activities. This guide highlights the measures fintech companies must adopt to detect, prevent, and comply with Anti-Money Laundering (AML) regulations.

Money Laundering and Fintech Companies

Fintech companies, due to their digital nature, are particularly vulnerable to money laundering schemes.

Criminals may attempt to exploit fintech platforms by:

Masking the source of funds through anonymous or rapid transactions;

Using peer-to-peer (P2P) payment systems to transfer illicit money; and

Taking advantage of the speed and global reach of fintech services to layer and integrate illegal funds.

Common avenues for laundering money within fintech include:

Digital Wallets

Criminals may use digital wallets to store illicit funds and transfer them across borders without drawing attention.

Cryptocurrency

Cryptocurrencies provide anonymity and can be used to obscure the trail of illegal money. This makes fintech platforms that deal in digital currencies particularly susceptible to money laundering.

P2P Lending Platforms

By participating in peer-to-peer lending, money launderers can funnel illicit funds through loans, making it difficult to trace the origins of the money.

AML Regulations in the Fintech Industry

Fintech companies are required to implement robust AML measures To mitigate these risks.

The following regulations are crucial for ensuring compliance:

Know Your Customer (KYC) Requirements

KYC is a fundamental aspect of AML compliance within the fintech sector. Fintech companies must:

Verify the identity of users before they can access services, particularly for financial products or platforms involving cryptocurrencies;
Collect and verify user information, such as government-issued identification and proof of address; and
Identify the ultimate beneficiaries and owners behind transactions, ensuring they do not attempt to hide illicit funds behind layers of digital transactions.

KYC procedures should also include an assessment of the customer's risk profile and the identification of any suspicious patterns or activities.

Sanctions Screenings

Sanctions screening is another critical requirement for fintech companies, especially those operating on a global scale. This involves:

Cross-checking users against international sanctions lists, ensuring that the platform does not facilitate transactions for sanctioned individuals or entities;
Blocking or freezing accounts linked to individuals or organisations on sanctions lists.
Implementing a process to report any suspicious or illegal activity to the relevant authorities.

Sanctions screening should be conducted continuously, especially given the dynamic nature of fintech users and the frequent changes in global sanctions.

Transaction Monitoring

Transaction monitoring is at the heart of AML compliance within fintech platforms. It involves:

Real-time monitoring of transactions to detect unusual or suspicious patterns;
Using artificial intelligence and machine learning algorithms to flag high-risk transactions.
Filing suspicious activity reports (SARs) with relevant authorities, such as the Financial Intelligence Unit (FIU), when potential money laundering activities are detected.

Red flags for fintech platforms may include:

Frequent transfers of large sums of money across multiple accounts;
Unexplained use of multiple payment methods or accounts;
Cryptocurrency transactions that fall outside of normal patterns for a user or involve high anonymity coins.

Transaction monitoring must be thorough and adaptive, as the pace of transactions within fintech is typically faster than in traditional financial institutions.

Adequate Supervision

To ensure compliance with AML regulations, fintech companies must establish strong governance and oversight mechanisms. The board of directors and senior management play a critical role by:

Appointing a dedicated AML compliance officer with expertise in fintech AML risks
Overseeing the implementation and regular review of the company's AML program.
Ensuring all employees are trained on AML procedures and that the company's technology is up to date to detect new forms of money laundering.

A successful AML program requires continuous supervision, as fintech companies face rapidly evolving threats. This includes frequent audits, updated risk assessments, and a proactive approach to regulatory changes.

By adhering to these AML guidelines, fintech companies can protect themselves from money laundering risks and ensure they remain compliant with both local and international regulations.

Sanctions lists

Our Sanctions Database covers Sanctions Lists from OFAC, Canada, HM Treasury, EU, Australia and many more regions and organisations globally.

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PEP data

Our Politically Exposed Persons (PEP) database covers about 1million records from every country worldwide. Lists also include family members and close associates of PEPs.

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Crime Watchlists

Our Crime Database includes more than 8k records from Interpol and the FBI. More Watchlists are being added continuously

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Crime and Watchlist Data

Adverse media

Bolster your AML compliance with our global adverse media data screening. Screen against more than 60k global news sources with custom keywords.

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For a detailed guide on how AML Sanctions Screening applies to your industry, click the relevant icon below.

Financial Institutions

Professional Services

Global Sanctions Lists

The sanctions lists below are included in every sanctions data subscription. Additional sanctions lists can be included on request, please contact support for more information.

United States

Office of Foreign Asset Control (OFAC)

Specially Designated Nationals (SDN), Consolidated Sanctions List (Non-SDN) and various additional sanctions lists (MBS, CCMC, CMIC, CAPTA, FSE, PLC, SSI)

Canada

Global Affairs Canada

Consolidated Canadian Autonomous Sanctions List incl. Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act.

United States

Department of State (DoS)

ITAR Debarred (ITAR), Nonproliferation Sanctions (ISN), Cuba Restricted List

United States

Bureau of Industry and Security (BIS)

Entity List (EL), Denied Persons List (DPL), Military End User List (MEU), Unverified List (UVL)

United States

Financial Crimes Enforcement Network (FinCEN)

311 Special Measures

United States

Department of Homeland Security (DHS)

Uyghur Forced Labor Prevention Act Entity List (UFLPA)

United States

U.S. Customs and Border Protection

Withhold Release Orders

Argentina

Ministry of Justice

Public Registry of Persons and Entities Linked to Acts of Terrorism and Financing (RePET)

Brazil

Brazil Central Bank

Brazil

Brazil Federal Government

Empresas Inidôneas e Suspensas (Disreputable and Suspended Companies)

Brazil

Brazil Tribunal de Contas da União (TCU)

List of individuals disqualified from public service and debarred bidders

European Union

European Bank for Reconstruction and Development

List of Ineligible entities

European Union

Consolidated list of persons, groups and entities subject to EU financial sanctions (CFSP)

United Kingdom

Office of Financial Sanctions Implementation (OFSI)

Financial Sanctions by The Office of Financial Sanctions Implementation (OFSI), part of Her Majesty's Treasury (HMT)

Israel

National Bureau for Counter Terror Financing

Terrorist List National Bureau for Counter Terror Financing of Israel

Belgium

Federal Public Service Finance

National Financial Sanctions

Netherlands

Government of the Netherlands

National Sanctions List Terrorism

France

Ministry of Economy, Finance, and Recovery

List of Asset Freezes (GEL)

Switzerland

State Secretariat for Economic Affairs (SECO)

Consolidated Swiss Sanctions List

Poland

Ministry of Internal Affairs and Administration

List of persons and entities subject to sanctions

United Arab Emirates

Supreme Council for National Security

National Sanctions List with names of individuals and entities identified as

India

Ministry of Home Affairs

Terrorist Organizations and Unlawful Associations List

Singapore

Monetary Authority of Singapore

MAS Enforcement Actions

Singapore

Attorney-General's Chambers of Singapore

Terrorism (Suppression of Financing) Act 2002

Malasya

Ministry of Home Affairs

Ministry of Home Affairs List (Act 613, Section 66B)

Japan

Ministry of Finance

Economic sanctions and target list

South Africa

Financial Intelligence Centre (FIC)

Targeted Sanctions List

South Africa

Financial Sector Conduct Authority

Targeted Sanctions List

South Africa

National Treasury Department

Restricted Supplier and Tender Defaulter Report

Morocco

Commission Nationale chargée de l'application des sanctions (CNASNU)

Local Terrorist List with names of individuals and entities identified as terrorists by CNASNU (Commission Nationale chargée de l'application des sanctions)

Nigeria

Nigeria Sanctions Comitee

Nigeria Sanctions Commitee's sanctions list

* Additional sanctions lists can be added on demand. Just reach out to our Customer Success Team.

Politically Exposed Persons

What are Politically Exposed Persons (PEPs)?

Domestic Politically Exposed Person (DPEP)

These are individuals who hold prominent public positions within their own country.

This includes:

Heads of state or government
Senior politicians, government ministers, and judiciary officials
Senior executives of state-owned corporations
High-ranking military officials.They are classified as DPEPs due to their potential access to public resources, which could make them vulnerable to corruption or abuse of power.

Foreign Politically Exposed Person (FPEP)

These are individuals who hold, or have held, similar high-level roles in foreign countries. FPEPs are foreign officials or their associates who might also be in a position to abuse their influence for personal or financial gain.

Examples include:

Foreign heads of state or government officials
Senior politicians or diplomats from foreign governments
Foreign judges or military leaders

Domestic Politically Influenceable Person (DPIP) - Family Members

These are close relatives of Domestic PEPs (DPEPs).

Family members can include:

Spouses or partners
Children and their spouses or partners
Parents, siblings, or other close relatives. Due to their relationship with a politically exposed person, they may have access to privileged information or influence, which makes them susceptible to exploitation or corruption.
Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Foreign Politically Influenceable Person (FPIP) - Close Associates

These are individuals who maintain close business or personal relationships with Foreign PEPs (FPEPs).

A close associate could be:

Business partners
Close friends or advisers
Legal representatives or those with significant control over a PEP’s assets FPIPs are often involved in business dealings or transactions that may raise concerns about conflicts of interest or the misuse of political connections.
Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Each of these classifications is used in anti-money laundering (AML) and know-your-customer (KYC) processes to identify and mitigate risks associated with potential corruption or financial crimes. Identifying these individuals helps institutions flag potentially suspicious activities that may be linked to political influence.

Smart screening technology for effective AML compliance

Less False Positives and False Negatives

Name matching is the real challenge in Sanctions & AML compliance. Transliteration issues, nicknames, honorifics, and spelling errors are some of the factors that make name screening a challenge. This cannot be solved with simple fuzzy algorithms.

Our industry-leading screening technology is based on the latest research and achievements in Natural Language Processing (NLP) and Artificial Intelligence (AI) used by organisations such as Amazon, LinkedIn, and U.S. Homeland Security.

Name matching explained

This technology helps reduce false positives significantly, while making sure that no real matches slip through the cracks.

Easily integrated into your own system environment

Integrate Business Partner Screening with your own system environment by simply using our REST API, our Sanctions Database Exporter option, or our pre-built integrations for SAP, BigID and API3 Airnode.

Sanctions & AML API

Developer friendly, easy to implement and Enterprise-ready RESTful API with a guaranteed uptime of more than 99.99% and > ~200ms response time.

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Batch AML

Through batch verification, businesses can efficiently manage and update large volumes of data, ensuring compliance with ease.

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Crime Watchlists

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FBI and Interpol Data

Gain access to our comprehensive global Criminal Watchlists database covering more than 8k records.

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Mitigate sanctions risk with hourly data updates. Audit relevant timestamps for increased transparency.

Smart Matching Technology

Maximise the benefits of our screening technology: Significantly reduce false negatives and false positives, and boost accuracy.

FBI and Interpol Watchlists

FBI's Most Wanted & Fugitives

The FBI's Most Wanted list is maintained by the FBI and publicly available on their website. Removal from the list typically occurs only upon capture, death, or dropped charges.

*Only available on our Standard Plan

Why AML compliance is important

For businesses to actively prevent financial loss and reputational damage, it's crucial that comprehensive due diligence processes are carried out.

Datanamix’s due diligence product suite includes AML (anti-money laundering) sanctions screening, PEP (PIP) data, Adverse Media and Crime data – all customisable depending on your specific industry, and unique business needs.

Datanamix offers a suite of AML Sanction Screening products to enable the right level of risk mitigation for every class of business – from accountable institutions bound by the FIC Act, to SMEs simply looking to protect their interests.

Datanamix due diligence product suite includes AML (anti-money laundering) Sanctions Screening, PEP (PIP) data, Adverse Media and Crime Data – all customisable depending on your specific industry, and unique business needs.

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Adverse Media

Adverse Media Screening is the process of monitoring public sources, like news and social media, to detect negative information about individuals or organisations. It helps businesses identify risks such as criminal activity, fraud, or regulatory violations, which could harm their reputation or legal standing. Used for risk assessment and compliance (e.g., anti-money laundering or Know Your Customer regulations), adverse media screening is often automated to handle large volumes of data and provide real-time alerts. It's a key part of due diligence and risk management strategies.