Lesson 2 · Practitioner · Both · 24 min
AML/CFT & the Risk-Based Control Stack
How anti-money laundering and counter-terrorist financing obligations shape product policy, monitoring, and partner bank diligence.
Objectives
- ▸Explain ML/TF risk in product language
- ▸Connect CDD/EDD to ongoing monitoring
- ▸Identify control owners across product, ops, and compliance
- ▸Design policy levers (limits, cooling-off, geo blocks) that satisfy risk appetite
Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) require regulated entities to prevent, detect, and report misuse of the financial system. For product teams, that means designing products that are hard to abuse and easy to investigate.
- Placement → layering → integration: classic laundering stages your monitoring should disrupt.
- Terrorist financing may involve small, seemingly legitimate transfers—rules must catch patterns, not only large tickets.
- Three lines of defence: business (1st), risk/compliance (2nd), audit (3rd).
Key terms
AMLCFTCDDEDDPMLAFIU-INDRisk appetite