If you’ve ever wondered why banks, ask so many questions when you open an account—like where your money comes from or why you’re sending funds overseas—the answer lies in decades of rules designed to stop criminals from sneaking dirty money into the financial system.
That journey is the story of Anti-Money Laundering (AML) and compliance. And it all started more recently than you might think.
1970: The First Alarm – The Bank Secrecy Act (BSA)
Back in the 1960s, drug cartels and organized crime groups were moving mountains of cash through U.S. banks without anyone batting an eye. Regulators realized criminals were winning simply because no one was watching.
Enter the Bank Secrecy Act (BSA) in 1970—America’s first big AML law. Suddenly, banks had to start keeping records and reporting large or suspicious transactions. It was the financial world’s version of installing security cameras for the first time.
1989: The World Joins In – FATF is Born
By the late 1980s, the drug trade wasn’t just a U.S. problem—it was global. To fight it, the G7 countries came together in 1989 to create the Financial Action Task Force (FATF).
Think of FATF as the “rulebook writer” for AML. Instead of each country fighting crime alone, FATF set international standards, so everyone was playing by the same rules.
This was the moment AML stopped being just a national issue and became a global mission.
2001: A Tragic Turning Point – The USA PATRIOT Act
Then came September 11, 2001. The terrorist attacks revealed a new reality: money laundering wasn’t just about drug dealers anymore—it was also about terrorist financing.
The U.S. responded with the USA PATRIOT Act. Banks now had stricter obligations:
Know Your Customer (KYC) checks became mandatory.
Customer Due Diligence (CDD) got tougher.
Regulators demanded closer monitoring of who was moving money and why.
This was a turning point where AML became about national security, not just financial crime.
Today: The Modern AML Era
Fast forward to today, and AML touches almost everything:
Fintech apps asking for selfies and ID checks.
Crypto exchanges building compliance teams.
Real estate and law firms filing suspicious transaction reports.
And the tools? It’s no longer just people reviewing bank statements. Now it’s AI, machine learning, and automation scanning millions of transactions to catch suspicious patterns faster than any human could.
Criminals are getting smarter—but so are the defences.
Why This History Matters
Each step in AML history happened because the world realized crime was evolving:
Drugs in the 1970s.
Global cartels in the 1980s.
Terrorism in the 2000s.
Cybercrime and crypto today.
AML keeps changing because criminals keep changing.
And while it may feel like endless paperwork when your bank asks about your income or your transaction, remember this: AML is society’s way of saying “we’re watching, and dirty money isn’t welcome here.”
