What is the FATF?
The Financial Action Task Force (FATF) is the intergovernmental body responsible for setting global standards to prevent money laundering and terrorist financing (AML/CFT). Its mission is critical in a context where money laundering is estimated to account for up to 5% of global GDP.
It works alongside regional bodies such as MENAFATF and GAFILAT, which are responsible for implementing these standars at the local level, with the aim of achieving an increasingly harmonized regulatory framword.
Financial Inclusion as an AML Strategy
In June 2025, the FATF published a new Guidance on Financial Inclusion and Anti-Money Laundering and Counter-Terrorist Financing measures, placing even greater emphasis on financial inclusion as a core objective of any AML strategy. Currently, 1.3 billion adults remain outside the formal financial system, meaning they do not hold an account with a bank, similar institution, or mobile money provider.
In light of this reality, the FATF acknowledges that excluding individuals or groups from the financial system reduces traceability, pushes activity into informal or unregulated channels, and ultimately weakens the effectiveness of the AML framework.
In this context, digital identity is recognized as a key enabler of inclusion— provided it is built on reliable, independent systems with appropriate anti-fraud mitigations in place.
KYC is the first line of defense against fraud
The FATF itself makes clear in its Digital Identity Guidance that digital identity can be used to meet KYC/CDD requirements, provided the entity can demonstrate how the customer was identified and verified.
This underscores the importance of having a defensible KYC system that delivers evidence, traceability, and resilience against fraud.
AML compliance must focus on demonstrable effectiveness in the face of audits, thereby avoiding regulatory sanctions.
How Facephi Helps Meet FATF Requirements Through Defensible KYC
Facephi’s technology delivers 360° compliance-by-design protection, enabling financial institutions to align with FATF expectations and national regulations. It includes:
Multi-layered onboarding:
Closing typical AML/CFT gaps from the very first point of contact.
- Secure document verification
- Facial biometrics with robust liveness detection
- Validation against government databases
- Clear, traceable evidence at every step of the process
- Frictionless user experience
Audit-ready evidence:
- End-to-end onboarding traceability
- Time-stamped records with explainable decisions
- Audit trails prepared for regulatory review
Stop fraud before it happens:
By combining identity verification with additional signals (advanced analytics, device and environment risk), it is possible to stop fraud attempts such as Account Takeover (ATO), New Account Fraud (NAF), or mule account networks. This helps reduce operational costs and regulatory penalties.
KYC (Know Your Customer) is more than an operational procedure. It is the first and most critical control within the AML/CFT framework and must be demonstrable for regulatory inspections and audits. Can your institution show how it prevents fraud and illicit activities from entering the system?