Identity verification definition and meaning | AML glossary
Identity verification definition: What it means in AML compliance.
Identity verification is the process of confirming that a person is who they say they are. It’s a simple idea with far-reaching consequences. For regulated firms in the UK, especially in sectors like finance, law, property, and gambling, it’s a required part of doing business under Anti-Money Laundering (AML) regulations. You’re not just collecting a name and a date of birth but making sure those details connect to a real person, and that person isn’t hiding behind a false identity to commit fraud or move criminal funds.
Identity verification combines documents, data sources, and in some cases biometric checks. That might mean asking for a passport and comparing it to a live selfie. Or running a name and address through electoral roll and credit reference data. The goal is to gain a reasonable level of confidence that a new customer or client is genuine and traceable. Not perfect certainty, but enough confidence to reduce risk and meet legal obligations.
Technology has changed how this is done. You’re no longer limited to face-to-face checks or manual file reviews. Remote, digital identity verification tools have made it possible to meet compliance standards while delivering a smoother experience for clients. Still, these tools don’t remove the responsibility from your firm. You remain accountable for deciding what checks are appropriate, what risks you’re exposed to, and how well your controls are working.
Identity verification is often the first point of contact in the client lifecycle.
But it isn’t a one-and-done task. People move house, change names, or try to hide behind aliases. That means it can be part of ongoing monitoring too. Especially if you’re working with high-risk clients, or ones with connections to higher-risk jurisdictions or industries. It’s part of building a full picture of the client relationship, not just at onboarding, but throughout its lifespan.
Why identity verification matters for AML compliance.Â
Failing to verify identity properly can lead to serious consequences. And not just the headline-grabbing fines. You risk letting in clients who are laundering money, financing terrorism, or hiding stolen assets.Â
When regulators look at your AML programme, they pay close attention to how you verify identity. They want to see that you understand the risks in your business and have taken appropriate steps to manage them. They’re looking for evidence that your controls work in practice, not just on paper. If your identity checks are too weak or inconsistently applied, you’ll struggle to prove that.
For AML compliance managers, identity verification is often one of the biggest pressure points. It affects customer experience, internal workflow, and your exposure to enforcement. Get it wrong and you’re exposed on all three fronts. But get it right and you can build trust, reduce onboarding delays, and spot suspicious behaviour sooner.
To do that, start by making sure you understand your client base. What types of people or businesses are you dealing with? Where are they based? What risks are linked to their sector or geography? This helps you design risk-based identity checks so you’re not applying the same level of scrutiny to a low-risk UK client as you would to someone linked to a sanctioned jurisdiction.
Next, review your tools and data sources. Are they giving you high-quality matches? Do they flag mismatches or anomalies clearly? Are staff confident using them? A common weak spot is over-reliance on automated systems without regular review. Make sure you’ve got a process for manual review and escalation when something doesn’t look right.
Also consider how identity checks fit into your wider AML workflow. They shouldn’t be siloed off from monitoring or PEP and sanctions screening. That means identity data needs to be accessible and connected across systems.
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The system efficiently and effectively completes our KYC and KYB verification requirements during onboarding.
Robin Kear
Senior Account Executive
