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Remediation definition and meaning | AML glossary

What is remediation? Definition and AML compliance meaning.

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Remediation definition: What it means in AML compliance.

Remediation refers to the process of identifying, correcting, and improving deficiencies in client files, risk assessments, or compliance processes. This typically involves reviewing and updating outdated or incomplete information, addressing compliance gaps, and ensuring that a firm’s records meet regulatory standards.

Remediation is often triggered by:

  • Internal audits
  • Regulatory reviews or findings
  • Mergers or acquisitions
  • Changes in regulation or risk appetite

Why remediation matters to compliance.

Remediation is a critical part of maintaining ongoing compliance. Regulators expect firms to proactively address issues, not just identify them. Proper remediation demonstrates that a firm is managing risk responsibly and taking appropriate corrective actions.

Failing to remediate compliance weaknesses can lead to:

  • Regulatory enforcement action
  • Increased supervisory attention
  • Reputational damage
  • Financial penalties

Common remediation activities.

Remediation work can be complex and resource-intensive, especially for firms with legacy systems or poor data quality. Common tasks include:

  • Updating Know Your Customer (KYC) records
  • Reassessing client risk levels
  • Collecting missing documentation or verification
  • Closing high-risk or non-compliant accounts
  • Re-training staff or updating internal policies

How technology supports remediation.

Technology can play a crucial role in reducing the burden of remediation. Digital compliance platforms help firms:

  • Automate outreach to clients for missing documents
  • Reassess risk using up-to-date data and rule-based scoring
  • Track remediation progress with audit-ready records
  • Identify trends and root causes behind recurring compliance failures

By digitising remediation workflows, firms can act faster, reduce manual error, and remain aligned with regulatory expectations.

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