KYC (know your customer) is how a forex broker verifies each client's identity, address and suitability before and during the relationship. AML (anti-money laundering) covers screening clients against sanctions and politically exposed person (PEP) lists, checking the source of funds, monitoring deposits, withdrawals and trading for suspicious activity, and reporting it to the authorities where required. Most brokers automate KYC and AML through a KYC provider connected to their forex CRM, with exact requirements set by their regulator.
- KYC verifies who the client is; AML monitors the money and activity.
- Core checks: ID, proof of address, sanctions and PEP screening, and source of funds for higher-risk clients.
- Ongoing monitoring of deposits, withdrawals and trading is required, not just onboarding checks.
- KYC providers connected to the forex CRM automate most checks and keep audit trails.
- Requirements differ by regulator, so align your procedures with your licence and legal adviser.
Looking for KYC and payment integrations? KYC providers, payment gateways and crypto deposits connected to your CRM.
KYC and AML are licence requirements in almost every jurisdiction, and payment providers check them too. Weak procedures can cost you your licence or your banking.
The core checks
| Check | What it covers | When |
|---|---|---|
| Identity | Passport or ID card, often with a liveness or selfie check | Onboarding |
| Address | Utility bill, bank statement or electronic check | Onboarding |
| Sanctions & PEP | Screening against sanctions and politically exposed person lists | Onboarding and ongoing |
| Suitability | Experience and knowledge questionnaire where required | Onboarding |
| Source of funds | Where the client's money comes from, for higher-risk clients | Risk-based |
| Transaction monitoring | Unusual deposits, withdrawals or trading patterns | Ongoing |
Common red flags
- Deposits from one person's card and withdrawals to another's account.
- Deposits followed by withdrawals with little or no trading.
- Many accounts sharing devices, IP addresses or payment details.
- Documents that do not match, or clients from restricted countries.
How technology automates KYC and AML
A forex CRM connected to a KYC provider can verify documents automatically, screen against sanctions and PEP lists, block deposits or trading until checks are complete, flag unusual activity and keep a full audit trail for your regulator. See our payments and KYC integrations and trader's room features.
Responsibilities
Technology helps, but the licensed broker remains responsible for its KYC and AML programme, including policies, a compliance officer where required, staff training and reporting. Align your procedures with your regulator's rules and your legal adviser.
General information only, not legal, financial or tax advice. Each client is responsible for its licences and the laws of every country where it operates.