Supervision Goes Global, and So Should your KYC/AML Solution

Usually, regulators are not ahead of the private market. However, when it comes to consolidation of processes and functions, so it seems they are now pointing the way to financial institutions worldwide.

Here is what the titanic shift in global AML supervisory practices can teach us about the KYC/AML solution of tomorrow.

Regulation is Local, AML is Global

Trade is global, regulation is local. That has always been the gap the Muinmos Platform has bridged, most notably by its AI-powered Regulatory Classification functions.

 Recently, in an announcement by The Financial Action Task Force (FATF), FATF referred to a similar gap, the one between the global nature of financial crime and the local one of regulation: “Money laundering almost always crosses borders, and criminals exploit gaps between national legal systems to hide their activities and avoid punishment”.

Unfortunately, according to FATF, this makes the enforcement of financial crime highly ineffective: “FATF evaluations consistently show that investigating, prosecuting and sanctioning money laundering remains one of the weakest areas worldwide. Without more effective co-operation, countries cannot stop financial crime in its tracks”.

This is the backdrop to a series of steps taken in recent years by regulators, countries and interest groups worldwide, aiming at turning the tables and making AML supervision as global as possible.

One can identify three types of such endeavours:

1. consolidation of methodology;
2. consolidation of regulatory powers; and
3. increased cooperation.

We’ll shortly review each of these efforts.

Consolidation of Methodology

Of course, cross-border efforts to fight financial crime are nothing new – FATF itself is a great example of that.

In addition to FATF, there are also about a dozen FATF-Style Regional Bodies (FSRB). Those have recently decided to increase the level of standardization of their methodology. Most prominently, in June 2025 the “Consolidated Processes and Procedures for Mutual Evaluations and Follow-Up Universal Procedures” were published, aimed at aligning methodology across all FSRB’s in order to make sure AML frameworks are properly evaluated worldwide.

Another effort to create a unified methodology and therefore also increase cooperation is the new practical Handbook on International Cooperation against Money Laundering launched 5.9.2025 by FATF, the Egmont Group, the INTERPOL and the United Nations Office on Drugs and Crime (UNODC). The handbook aims at providing analysts, investigators, prosecutors and others essential tools to speed up investigations and bring more criminals to justice.

Consolidation of Regulatory Powers

Sometimes, adding a regulator can help consolidating regulatory powers. This is the case with the EU’s new AML watchdog, AMLA (the Anti-Money Laundering Authority).

AMLA was created under Regulation (EU) 2024/1620, which states, in Recital 2 to its Preamble, that “The cross-border nature of crime and criminal proceeds endangers the efforts of the Union financial system with regard to the prevention of money laundering and financing of terrorism. It is necessary to enhance those efforts at Union level through the creation of an authority responsible for contributing to the implementation of harmonised rules in that domain”.

Meaning, AMLA has two main functions:

• direct supervision over financial institutions; and
• harmonising AML frameworks across the EU (or, as we called it above, “consolidation of methodology”). In this regard, Recital 2 states: “such an authority should pursue a harmonised approach to strengthen the Union’s existing preventive AML/CFT framework and specifically AML/CFT supervision and cooperation between Financial Intelligence Units (FIUs). That approach is intended to reduce divergences in national legislation and supervisory practices and introduce structures that benefit the smooth functioning of the internal market…“.

And this brings us to the third type of supervisory globalisation, which is increased cooperation between competent authorities.

Increased Cooperation Between Competent Authorities

Cooperation MOUs between competent authorities are nothing new. Almost every national supervisory authority has several of them, and cooperates and coordinates with other similar authorities on a certain basis.

What seems to have changed lately is the understanding that this may be the only way to efficiently combat financial crime. This is expressed clearly in the words of FATF’s President, announcing the above mentioned handbook: “An international threat requires an international response. A victim can often be on the other side of the world to the criminals that are destroying their lives or livelihoods, so we need to see countries working more effectively together and multiplying our defences to keep people safe, bring more criminals to justice and recover ill-gotten gains.”

But not only cooperation between countries is needed – also between authorities in the countries and areas themselves.  

For this end, AMLA, the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) (the European Supervisory Authorities – the “ESAs”) have recently reached, on 25.7.2025, a “Multilateral Memorandum of Understanding on cooperation and exchange of information”, further unifying the supervision and investigation efforts in Europe.

KYC/AML Processes Often Suffer from the Same Failures

It is interesting to note that the very issues regulators and interest groups have been dealing with globally and attempting to resolve, plague also financial institutions, even though their scale, of course, is much smaller.

• Non-consolidated methodology – between different departments of the organization, or different entities. For example, many organizations do not have a unified scoring system to determine key decisions such as risk classification or PEP tier.
• Non-consolidated tooling – many organizations use different tools for the fulfilment of a single process. For example, in one jurisdiction identify verification will be performed by one provider, but in another jurisdiction the institution operates in another provider may be hired. This means not only potentially different methodology applied, but also carries the impact to the overall risk scoring, which now may not be comparable between clients of the same entity.
• Lack of communication internally between stakeholders – lack of “one source of truth” or “one single view” can hinder the efficient cooperation between departments and prevent the formation of a true holistic view of the case.

Like in the case of regulators, here to the result is much less efficient financial crime fighting; but it doesn’t end there – the results of disconnected tooling and fragmented processes in financial institutions are also:

• inferior customer experience – as the customer is required to wait while the inefficient, non-connected process occurs; and
• higher costs – multiple providers and slower onboarding mean more expenses and longer time-to-revenue.

Solving These Issues with Your KYC/AML Solution Should Also Go “Global”

Solving the fragmentation of global AML supervision is hard. In comparison, solving the issues of KYC/AML fragmentation is quite straightforward.

All one needs is a KYC/AML solution that is aligned with the same “global” – or holistic, in this case – approach. Specifically, one that:

• Operates according to one consistent methodology – as one Muinmos client said, the “consistency of KYC assessments and a superior customer experience were all factors that made Muinmos an obvious choice”. That is a given – a solution that provides different determinations in similar cases is not a scalable solution.

The methodology also has to be fully transparent and explainable – like Muinmos’ fully explainable AI. Anything else, may only expose you to risk and may cause more manual work eventually, if anything out of the ordinary will be revealed, and manual review will be required.

• Consolidated all tools in one, on a global scale – as one Muinmos client said, “Muinmos’ solution is very comprehensive and allowed us to automate our end-to-end onboarding and continuous due diligence (pKYC) in one platform”.

Anything less than this means not only waste of time and efforts, repetitive manual tasks and increased risk of errors; but also that it will not be possible to apply a single consolidated methodology.

Think, for example, of a Client Risk Assessment (CRA). In order for it to be complete, one needs to know numerous data-points, including the client’s category (Retail, Professional etc.). If one does not have that data-point in readiness for the calculation, the CRA will not be complete.

It is therefore imperative that all tools be connected to one another in one coherent system.

• One source of truth, one single view – as one Muinmos client stated, “Fragmented processes involving multiple teams and back-and-forth communication with clients were damaging the customer experience… we now provide a seamless customer experience that matches the quality of our solutions”.

Meaning, the internal, in-team cooperation also translates into external, customer-facing results.

To name but a few of those possible benefits achieved by Muinmos clients:

• 45%-96% reduction in onboarding time
• 32% savings in IT expenses
• 50% reduction in case handling time

Setting the Scene for Global Expansion

Another benefit which is very prominent among Muinmos clients is assisting global expansion.

86% of Muinmos’ clients interviewed stated Muinmos’ Platform helped their global expansion and compliance.

Meaning, having a holistic, global KYC/AML solution does not only improve results in one jurisdiction; but also to acquire new ones rapidly and efficiently.

In Conclusion

Usually, regulators are not ahead of the private market. However, in one specific area they are now pointing the way for the private market as well – consolidation of processes and methodology.

The private market can learn from this, and consolidate processes and methods in their own sphere. When it comes to KYC/AML, for example, use of holistic solutions such as the Muinmos Platform can entail significant benefits, such as the improvement of customer experience as well as operational efficiencies and improved compliance.