AML compliance often feels like trying to juggle while riding a unicycle—you’re expected to keep everything balanced while the rules keep changing.
The truth? Even well-meaning companies slip up. And in the world of Anti-Money Laundering (AML), those slip-ups can cost millions, wreck reputations, and even shut businesses down.
Let’s walk through the most common AML mistakes companies make, sprinkled with stories and real lessons—so you don’t repeat them.
Treating AML as a “Check-the-Box” Exercise
Many companies approach AML like it’s just paperwork: write a policy, tick a few boxes, and move on.
The problem? Criminals are creative. A static, cookie-cutter program won’t catch evolving risks.
Real-world flashback: A mid-size payment processor copied an AML manual from another company. Regulators fined them heavily when they discovered the policies weren’t tailored to their actual business model.
Fix it: Build a risk-based program that fits your company—not someone else’s.
Weak Customer Due Diligence (CDD)
Skipping thorough customer checks is like letting strangers into your house without asking who they are.
Too many businesses rush onboarding to avoid friction, only to realize later they onboarded fraudsters.
Fix it: Always verify identity, understand the customer’s business, and apply Enhanced Due Diligence (EDD) for high-risk clients.
Ignoring Ongoing Monitoring
AML isn’t just about onboarding—it’s about staying alert.
One bank famously onboarded customers cleanly, then never monitored their transactions. Years later, investigators found millions in suspicious transfers that went unnoticed.
Fix it: Monitor transactions continuously. Red flags often appear months or even years after a customer signs up.
Poor Recordkeeping
Think of records as your “receipts” in case regulators ask questions. Without them, you have no defence.
Common mistake: Companies keep incomplete SAR files, missing dates, transaction logs, or follow-up notes.
Fix it: Store all AML documents (SARs, due diligence files, monitoring reports) for at least 5 years, and make sure they’re easy to retrieve.
Inadequate Training
Your employees are your first line of defense. If they don’t know what red flags look like, suspicious activity slips right through.
Fix it: Train staff regularly with real-life case studies, not just dry slides. Make it interactive so they care about spotting risks.
Not Keeping Up with Regulatory Changes
AML rules evolve constantly. Some companies fail to update their programs, thinking “what worked last year will work this year.”
Fix it: Assign someone to track regulatory updates (FinCEN, FATF, OFAC) and refresh your AML program at least annually.
Failing to File Suspicious Activity Reports (SARs) Properly
Even when companies spot red flags, they sometimes:
- Delay filing
- Add opinions instead of facts
- Forget to follow up
Fix it: File promptly (within 30 days in the U.S.), keep it factual, and document everything.
The Human Side of AML Mistakes
Behind every compliance failure is a story. Sometimes it’s a small startup overwhelmed by regulations. Other times it’s a global bank cutting corners.
But the lesson is always the same: AML compliance isn’t about forms—it’s about protecting your business, your customers, and the financial system.
Mistakes will happen, but awareness is the first step to avoiding them.
Quick Recap – Avoid These AML Pitfalls:
Don’t treat AML as box-ticking
Don’t skip due diligence
Monitor continuously
Keep thorough records
Train your team
Stay updated on regulations
File SARs correctly
Because in compliance, the cost of mistakes is always greater than the cost of prevention.
