KYC and AML within the platform: compliance

Introduction

International regulators and licensing authorities strictly require the implementation of KYC and AML procedures to prevent fraud, money laundering and terrorist financing. The online casino platform should provide an automated and reliable process for identifying players, monitoring transactions and reporting to regulators.

1. Regulatory framework

Main standards:

FATF Recommendations (especially Rec. 10-16 by CDD and monitoring).
EU 4th and 5th AML Directives (for players from the European Union).
Local laws: UK Gambling Commission, MGA, Curacao, Federal Tax Service of the Russian Federation.

License requirements:

Completeness and accuracy of passport data, proof of address.
Keep records for at least 5 years after the end of the relationship with the customer.
Independent audit once a year.

2. KYC (Customer Due Diligence) Process

1. Data collection:

Full name, date of birth, address, copies of ID/passport documents, selfies.
Source of funds: bank statements or income statements at high limits.

2. Data verification:

Online verification through API providers (Onfido, Sumsub, Jumio).
PEP/Sanctions List screening (World-Check, OpenSanctions).
Geo-verification of IP and documents (Document OCR + geolocation software).

3. Risk levels:

Low Risk: basic KYC (automatic ID verification).
Medium Risk: Extended verification of the source of funds.
High Risk: manual pre-audit, periodic re-verification.

3. AML (Anti-Money Laundering) process

1. Transaction Monitoring:

Rules for threshold amounts, frequency of deposits/withdrawals, changing patterns of behavior.
Scenarios of "typical" suspicious patterns: structuring, rapid in-/out, round-trip.

2. Alerts:

Generate tickets when thresholds are exceeded or rules are triggered.
Prioritization by customer risk level and transaction volume.

3. Investigation and Reporting (SAR/STR):

Formation of Suspicious Activity Report with description of circumstances.
Automatic export of data in formats required by the regulator.
Internal Compliance Officer notification and submission to FIU as required.

4. Implementation architecture

UI [Frontend] -->	Registration Data	API [API-Gateway]
API --> Auth[Auth Service]
API --> KYC[KYC Service]
API --> AML[AML Service]
KYC -->	Verification via REST	VerifProvider [ID providers]
AML -->	Monitoring	MQ [(Message Queue)]
MQ --> Worker[AML Worker]
Worker --> DB[(KYC/AML Database)]
Worker --> Reports[Report Generator]
end
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5. Integration with external providers

6. Monitoring, logging and auditing

Metrics and dashboards (Prometheus/Grafana):

Number of successfully verified users and rejected attempts.
Number and speed of AML events and SARs.

Logs (ELK/EFK, Splunk):

Detail of each KYC/AML step: incoming data, provider responses, triggering rules.
Immutable (WORM) indexes to audit.
Audit trail: complete traces of all actions of administrators, compliance officers and system processes.

7. Technologies and tools

8. Risk management and re-verification

9. Implementation Recommendations

Conclusion