I haven’t yet had time to carry out a detailed analysis of the basic KYC rules [1] published by the Authority for Countering Money Laundering and Financing of Terrorism (AMLA). However, I did notice that the AMLA has some rather peculiar expectations of companies with AML/CFT duties, the obliged entities (OEs), e.g. banks [2]:

Understanding the purpose and intended nature of a business relationship or occasional transaction enables obliged entities to develop a holistic understanding of the customer.

Banks and other financial institutions are digital enterprises that do not know most of their customers (except through the transactions they carry out). It is inconceivable that these banks could have a ‘holistic’ understanding of all of their customers. Nor can this be expected of other OEs.

Is the AMLA perhaps a little out of touch?

It would be good if the AMLA were to develop a holistic understanding of OEs and of the many different customer groups and individuals.

Notes:

[1] Draft Regulatory Technical Standards on Customer Due Diligence, AMLR 28(1).
[2] Recital 14.