What Are AML and KYC Requirements for UK Money Transfer Operators?
Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements are legal obligations for all UK money transfer operators regulated by the Financial Conduct Authority (FCA). These regulations are designed to prevent financial crime, terrorist financing, and money laundering through the remittance system.
Under the UK Money Laundering Regulations 2017 (as amended), every MTO must implement robust AML/KYC procedures including customer identity verification, ongoing transaction monitoring, sanctions screening, and suspicious activity reporting (SARs) to the National Crime Agency (NCA).
Key AML/KYC Obligations for Money Transfer Operators
- Customer Due Diligence (CDD) — Verify the identity of every customer before processing transactions. This includes document verification, proof of address, and source of funds checks for higher-risk customers.
- Enhanced Due Diligence (EDD) — Apply additional scrutiny for high-risk customers, Politically Exposed Persons (PEPs), and transactions involving sanctioned countries or corridors.
- Ongoing Monitoring — Continuously monitor customer transactions for unusual patterns, velocity changes, and threshold breaches that may indicate money laundering.
- Sanctions Screening — Screen all customers and beneficiaries against global sanctions lists including HM Treasury, OFAC, EU, and UN consolidated lists.
- Record Keeping — Maintain complete records of all customer identification data, transaction records, and compliance decisions for a minimum of five years.
- Suspicious Activity Reporting — File SARs with the NCA when transactions or customer behaviour raise suspicion of money laundering or terrorist financing.
How Money Transfer Software Automates AML/KYC Compliance
Software can support customer checks, monitoring, review queues and audit records. Your compliance team determines the required controls and verifies how the implementation supports them; automation does not replace judgement.
- Automated Identity Verification — Integration with KYC providers like Onfido, Yoti, and Trulioo enables real-time document verification and biometric checks during customer onboarding.
- Real-Time Transaction Screening — Every transaction is automatically screened against AML rules, velocity limits, and sanctions lists before processing.
- Risk Scoring — Automated risk assessment assigns scores to customers based on their profile, transaction history, corridor risk, and PEP/sanctions status.
- Audit Trail Generation — Verify the events captured, retention, exports and any gaps using sample records. The operator remains responsible for the evidence and submissions required.
What AML/KYC Features Does Remitz Include?
Remitz provides compliance workflows integrated with your chosen providers where supported. Confirm the checks, monitoring rules, review permissions and audit/reporting outputs during validation. Plans and provider costs are separate; not every capability is included in every plan.
Regulatory Bodies Overseeing UK Remittance Compliance
UK money transfer operators must comply with regulations enforced by multiple bodies:
- FCA (Financial Conduct Authority) — The primary regulator for payment institutions and money transfer operators in the UK.
- HMRC — Oversees MSB registration and anti-money laundering supervision for certain categories of operators.
- PSR (Payment Systems Regulator) — Regulates payment systems and ensures access and competition in the payments market.
Compliance with PSD2 (Payment Services Directive 2), the UK Money Laundering Regulations 2017, and GDPR (General Data Protection Regulation) is also mandatory for all operators.
Further reading: for a full operational checklist see the FCA Compliance Checklist 2026.
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Review remittance software features against your own compliance programme and provider requirements.
