NorthRow

Source of Wealth (SoW) definition and meaning | AML glossary

What is Source of Wealth (SoW)? Definition and AML compliance meaning.

Back to AML glossary >

Source of Wealth (SoW) definition: What it means in AML compliance.

Source of Wealth (SoW) refers to the origins of a person’s total accumulated wealth, including income, investments, and assets. Verifying the source of wealth is a crucial part of Anti-Money Laundering (AML) compliance, particularly when dealing with high-risk clients, politically exposed persons (PEPs), and high-value transactions. It helps businesses assess financial legitimacy and prevent illicit funds from entering the financial system.

Source of Wealth (SoW) vs Source of Funds (SoF).

While Source of Wealth (SoW) describes how an individual or entity has generated their overall wealth (e.g, business earnings, inheritance, or investments), Source of Funds focuses on the origin of a specific transaction. Both checks are essential for conducting enhanced due diligence (EDD), ensuring that businesses engage only with legitimate customers.

Why verifying SoW is important

  • Prevents financial crime: Helps identify money laundering, corruption, and fraud.
  • Regulatory compliance: Required under UK Money Laundering Regulations and global AML frameworks.
  • Mitigates reputational risk: Protects businesses from associating with illicit wealth.

How do we verify Source of Wealth (SoW)?

Firms must gather reliable documentation to confirm a customer’s wealth origins. This may include:

  • Employment and salary records (e.g, payslips, tax returns)
  • Business ownership and financial statements
  • Inheritance documentation
  • Investment and asset records

How technology can help you to verify Source of Wealth (SoW).

Source of wealth verification isn’t necessarily fully manual, but it often requires a human-led review due to the complexity of assessing wealth origins. Technology can enhance due diligence processes by streamlining identity verification, screening clients against global watchlists, and monitoring for ongoing risk. Automated tools help businesses assess customer risk profiles and flag potential concerns, ensuring a more robust compliance framework.

We’ve worked with hundreds of regulated businesses. Let’s work together.

Book your free demo of our comprehensive ID&V, KYC, KYB and AML compliance management solution today.

Request Demo
Packages