Top 3 Best Practices in AML Compliance

2025/11/03

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A strong Anti-Money Laundering (AML) compliance program is no longer just a regulatory checkbox; it’s a core business necessity. As financial crime risks evolve, companies that fail to embed compliance into their daily operations face both reputational damage and severe financial penalties.

To put this in perspective, in 2023, regulators globally imposed more than US $6.6 billion in anti-money laundering (AML) fines, underscoring how costly compliance gaps have become. 

A standout example of this occurred in October 2024, when TD Bank had to pay over US $3 billion in penalties and enter a guilty plea to BSA violations, making it the largest AML-related fine in U.S. history. This staggering cost reflects deep, systemic failures—not just isolated oversights.

These cases aren’t meant to scare but to highlight a critical reality: knowing the rules isn’t enough; execution and strong processes matter most.

So, what does it take to build a compliance program that goes beyond the minimum requirements?

For more than 14 years, Payreto’s compliance experts have worked alongside financial services providers and regulated companies to refine what truly works in AML. The best practices outlined here come directly from that experience, offering practical insights to help strengthen your compliance program.

1. Understand Your Business’ Risk Appetite

Your AML risk appetite defines how strict or flexible you can be when onboarding customers. It is set through an AML Risk Assessment, the first step regulators expect when building a compliance program. Defining these limits early ensures you balance growth with regulatory expectations.

Three factors that shape your business’ risk appetite are:

  • Products and Services

Some offerings, like airline tickets or loading of e-wallets, face greater compliance review because they involve high transaction volumes, cash-intensive flows, or anonymity. These factors raise money laundering risks compared to low risk businesses like restaurants and retail.

  • Jurisdictional Regulations

Local laws and FATF guidance categorize exposure differently since each jurisdiction prioritizes risks based on its unique financial system, crime patterns, or geopolitical concerns. What regulators view as “elevated risk” in one country may be treated differently in another.

We’ve seen this firsthand while supporting a client that onboarded merchants across multiple regions, which meant tailoring our compliance approach to adapt to local regulators and the specific requirements of their acquiring bank.

  • Operational Capacity

The size of your compliance team, the technology in place, and the monitoring tools you use define how much exposure you can realistically manage. Building this capacity in-house takes time and resources, making proven expertise especially valuable.

Building on the earlier cases, we’ve developed established systems and optimized workflows that manage diverse client needs with both timeliness and consistency, ensuring smoother onboarding and regulator-ready compliance every time.

Your risk appetite sets the boundaries of your compliance work. Defining it through regular AML risk assessments ensures that your compliance program evolves with regulations, operational realities, and business goals.

2. Always Prioritize Objectivity

Once you’ve defined your risk appetite, the next step is to apply it fairly. 

During the onboarding and screening process, Customer Due Diligence (CDD) often reveals red flags, such as, incomplete financial statements, inconsistent records, or even adverse media hits that can leave compliance teams with a dilemma.

The best practice is simple: ask, don’t assume. Instead of outright rejecting a merchant for a red flag, give them a chance to clarify or provide additional documents. This approach not only prevents the loss of potential clients but also demonstrates to regulators and partners that your process is fair and defensible.

At Payreto, we practice this daily. When issues arise, such as missing proof of address or unclear ownership details, we highlight them objectively and request clarifications, providing facts without bias while leaving the final decision to our clients.

Ultimately, objectivity protects you from both unnecessary losses and reputational risks. By sticking to facts rather than assumptions, your compliance process remains transparent, reliable, and trusted.

3. Build Documentation as Your Foundation

Even the best risk assessments and screening processes fall short without proper documentation. From the start, organized records allow you to retrieve the right information instantly when regulators request audits, reports, or transaction details.

But documentation isn’t just for regulators, it’s also a scaling tool. Clear workflows and protocols for CDD, EDD, and escalation procedures become reference points for AML training, helping new employees learn quickly while keeping standards consistent as the business grows. 

For our clients, turning documentation into a real advantage comes down to three practices:

  • Frameworks that fit: We build documentation frameworks that integrate seamlessly into your team’s daily operations. We can either adapt to your existing templates or create new ones, making it easier for your team to understand and follow their processes.
  • Training: We deliver hands-on training tailored to client teams, whether that means existing workflows and identifying gaps, or introducing best practices where experience is limited. This helps staff apply protocols consistently and strengthen compliance across the board.
  • Automation: We introduced tools to generate reports automatically, especially critical in elevated risk industries where regulators require frequent transaction reports above certain thresholds.

Overall, documentation is the foundation of regulatory readiness, team training, and operational efficiency. When built with intention, it not only satisfies regulators but also creates a stronger, more scalable compliance function for your business.

From Compliance Burden to Business Advantage

Strong AML practices are the foundation for building resilience and trust. It’s not just about avoiding fines; it’s a strategic move to define your risk appetite, maintain objectivity, and establish robust documentation.

As an embedded banking operations partner, we deliver tailored AML compliance solutions that empower financial services providers to scale confidently, meet regulator demands, and build lasting trust with partners and customers.

Our approach turns compliance into a growth enabler—building a resilient and trusted organization that’s always one step ahead. With 14+ years of expertise, we’re equipped to strengthen your compliance and support your long-term growth.

References

FinCEN.gov. (2024, October 10). FinCEN Assesses Record $1.3 Billion Penalty against TD Bank. https://www.fincen.gov/news/news-releases/fincen-assesses-record-13-billion-penalty-against-td-bank

Gatenox. (2024, June 25). 2023’s biggest AML fines: Who got caught, and why? https://gatenox.com/2023s-biggest-aml-fines/