What does the term "AML" stand for in banking compliance?

The term "AML" in banking compliance stands for Anti-Money Laundering. This reference is central to a set of regulations and procedures aimed at preventing the process of making illegally obtained money appear legitimate. Financial institutions are required to implement AML programs to detect and report suspicious activities that could indicate money laundering, thus reducing the risk of being exploited by criminal enterprises.

AML encompasses a variety of compliance measures, including customer due diligence, monitoring of transactions, and reporting of any suspicious activities to regulatory authorities. It is a critical component of risk management strategies within banks and other financial institutions, as it helps to combat financial crimes and protect the integrity of the financial system. Understanding and implementing AML practices is not only a regulatory requirement but also essential for maintaining trust in the banking industry.