Jul 21, 2025
In a sector where trust is the foundation of every relationship, KYC/AML compliance has become a critical pillar of asset management. With strengthened European regulations, increasingly complex investor structures, and digital onboarding journeys, asset managers must now combine regulatory rigor, operational efficiency, and a seamless client experience.
Here’s a comprehensive guide to understanding the challenges, requirements, and best practices for KYC/AML compliance in asset management.
KYC / AML: Definitions and Regulatory Framework
KYC (Know Your Customer): A set of procedures aimed at identifying and verifying a customer (individual or entity), understanding the origin of their funds, and clarifying their investment intentions.
AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism): Measures designed to detect, prevent, and report suspicious activities related to money laundering or terrorist financing.
European Framework for Asset Managers
Asset managers are subject to various regulations, including:
EU AMLD 5/6 Directives (transposed via the French Monetary and Financial Code)
SFDR regulation for ESG and non-financial disclosures
CSSF (Luxembourg), AMF (France), SEC (USA) rules for due diligence and vigilance
MiFID II, which ensures investor suitability for financial instruments
They must implement a risk map, onboarding and ongoing due diligence programs, and maintain complete traceability of data and actions.
Why KYC/AML Compliance Is Crucial in Asset Management
1. More International and Complex Investor Profiles
Family offices, fund-of-funds, holdings, trusts, sovereign funds—these complex vehicles make UBO (Ultimate Beneficial Owner) identification increasingly challenging.
2. High Reputational Risk
KYC non-compliance may result in:
Regulatory sanctions
Loss of EU passporting rights
Heavy financial penalties
Brand damage and loss of client trust
3. Increasing Regulatory Pressure
Authorities now demand tighter controls, full auditability, and constant updates. Paper-based processes are no longer sufficient.
KYC/AML Obligations for Asset Managers
Obligation | Description |
Identification | Collect and verify identity documents, legal entity data, ownership structure |
UBO Verification | Full traceability up to beneficial owners with >25% shareholding |
Source of Funds | Supporting documents and consistency with investor profile |
Risk Profiling | Assigning the appropriate due diligence level (standard, enhanced…) |
Ongoing Monitoring | Regular updates and verification cycles |
Archiving & Traceability | Store audit-proof records for at least 5 years |
Alert Screening | Automated checks against sanctions lists, PEPs, and watchlists |
TRACFIN Reporting | Mandatory in case of suspicion of money laundering or irregularities |
How to Industrialize KYC/AML Compliance
With a growing number of subscribers and increasing “retailization” (advisors, platforms, institutions), manual KYC processes are reaching their limits. Automating compliance is becoming a must.
Key Components of Modern, Efficient KYC:
Dynamic Forms – Adapted to each profile (individual, entity, trust...)
Automated Verification – ID documents, UBO registries, proof of address
Smart Screening – Access to PEP/sanction lists with contextual alerts
Auditable Workflows – Tracked steps, risk scoring, audit-ready documentation
Secure Portals – For clients and distributors to centralize actions, e-sign, and manage follow-ups
Benefits of a Digital Approach
Benefit | Impact |
Time Savings | 60–80% reduction in processing time |
Reduced Risk | Full compliance and simplified audits |
Fewer Commercial Frictions | Improved experience for investors |
Automatic Updates | Easier monitoring with automated reminders |
Centralized Data | Simplified regulatory archiving and RCCI reporting |
Best Practices for Strong KYC/AML Compliance
Segment clients based on risk level (simplified vs. enhanced KYC)
Choose an evolutive regtech solution that integrates with your business tools
Regularly train both compliance and business teams
Track key compliance KPIs: completion times, rejection rates, PEP alerts
Automate KYC from the very first step of the subscription journey
Case Study: B4Finance
To meet these growing demands, solutions like B4Finance have emerged, enabling asset managers to fully digitalize their KYC/AML compliance workflows.
The platform offers:
Automated onboarding workflows, including full KYC from first contact
Advanced UBO management with dynamic, responsive forms
API integrations with top screening providers (WorldCheck, Dow Jones, Acuris Risk Intelligence) for real-time filtering
Connections to official registers (e.g., INPI) and third-party data providers (Altares) to enrich and accelerate verification
Centralized monitoring and legal archiving in a GDPR-compliant, auditable interface
Over 200 fund managers already rely on B4Finance to secure and scale their compliance operations.
The result: a smoother investor journey, lower processing costs, and drastically reduced regulatory risks.
Conclusion
KYC/AML compliance is no longer just a regulatory requirement in asset management—it has become a core component of operational and commercial performance.
In the face of stricter controls, diverse investor profiles, and the need for scalability, automation and industrialization of compliance processes are now essential.
To meet these demands, relying on robust, specialized solutions tailored to the asset management ecosystem—like B4Finance—provides both a competitive edge and regulatory peace of mind. Book a demo now!
