Comprehensive Glossary
In an era of increasing financial crime, fraud, and regulatory scrutiny, businesses operating in financial services, fintech, and cryptocurrency must adhere to strict compliance standards to prevent illicit activities. Failure to comply with anti-money laundering (AML) regulations, Know Your Customer (KYC) requirements, and transaction monitoring rules can result in severe penalties, reputational damage, and legal consequences.
This glossary provides essential definitions and concepts related to financial compliance, crypto investigations, identity verification, and Open Source Intelligence (OSINT).
This glossary serves as a comprehensive knowledge base for professionals working in financial compliance, AML, fraud prevention, cybersecurity, and regulatory affairs. It provides clarity on industry-specific terminology, enabling businesses to develop stronger compliance frameworks and combat financial crime more effectively.
A
🔹 Adverse Media Screening – The process of identifying negative news reports related to an individual or business that could indicate financial crime, reputational risk, or regulatory concerns. This is commonly used in due diligence and risk assessments.
🔹 AI-Powered Fraud Detection – Advanced machine learning models that analyze transactional behavior to detect anomalies, reducing fraud risks and false positives. AI continuously learns and improves detection efficiency over time.
🔹 AML (Anti-Money Laundering) – A set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. Financial institutions are required to implement AML programs to monitor and report suspicious activities.
🔹 Automated Rule-Based Alerts – Compliance systems that generate alerts when transactions or behaviors deviate from predefined risk rules. These alerts help financial institutions respond quickly to potential financial crimes.
B
🔹 Behavioral Anomaly Detection – AI-driven analytics that flags unusual spending or transactional patterns that may indicate fraud or money laundering. It helps compliance teams focus on high-risk activities.
🔹 Blockchain OSINT – The use of blockchain explorers, forensic tools, and intelligence platforms to track cryptocurrency transactions. This is essential for identifying illicit activities such as fraud, tax evasion, and money laundering.
C
🔹 Corporate Registry Checks – The verification of a company’s registration details, financial history, and ownership structure using official corporate databases. This helps in identifying shell companies and hidden UBOs (Ultimate Beneficial Owners).
🔹 Crypto Forensics – The analysis of blockchain transactions to trace illicit activities such as fraud, ransomware payments, and darknet transactions. Crypto forensics tools help law enforcement and compliance teams track the flow of illicit funds.
🔹 Crypto Travel Rule – A regulation introduced by the Financial Action Task Force (FATF) that mandates Virtual Asset Service Providers (VASPs) to share transaction details for compliance purposes. This rule aims to enhance transparency in crypto transactions.
D
🔹 Dark Web Intelligence – The process of monitoring darknet forums, marketplaces, and encrypted communications to detect illicit activities, such as money laundering and cybercrime. This is a key component of OSINT investigations.
🔹 Decentralized Reputation Scoring – A blockchain-based trust system that assigns reputation scores to users based on past transactions and interactions. This helps P2P marketplaces and crypto exchanges assess trustworthiness.
🔹 Due Diligence – The process of evaluating the risks associated with a customer, business partner, or transaction before proceeding. Financial institutions conduct due diligence to ensure compliance with AML regulations.
E
🔹 eKYC (Electronic Know Your Customer) – A fully digital identity verification process that uses AI, biometrics, and document authentication. eKYC enhances compliance while reducing friction in customer onboarding.
🔹 Enhanced Due Diligence (EDD) – A more thorough review required for high-risk customers or transactions. EDD includes deeper background checks, UBO identification, and continuous risk monitoring.
🔹 Escrow Smart Contracts – Automated blockchain-based contracts that hold funds securely until transaction conditions are met. These are commonly used in P2P marketplaces to reduce fraud risk.
F
🔹 Facial Recognition & Reverse Image Search – AI-powered technologies used in KYC processes to verify user identities by matching photos with global databases. This helps detect fraud and impersonation attempts.
🔹 Fraud Risk Scoring – A system that assigns risk scores to transactions or users based on behavioral patterns, transaction frequency, and location. Higher scores indicate increased fraud risk.
G
🔹 Geofencing & Jurisdiction Monitoring – A compliance technique that tracks the locations of transactions to ensure they comply with regional regulations. It helps identify illegal cross-border financial activities.
I
🔹 ID Document Verification – The automated process of validating government-issued identity documents such as passports, driver’s licenses, and national IDs. It helps businesses verify customer identities and prevent fraud.
🔹 Identity Verification API – An integrated service that allows businesses to verify users’ identities in real time, helping prevent fraud and ensuring compliance with KYC regulations.
I
🔹 ID Document Verification – The automated process of validating government-issued identity documents such as passports, driver’s licenses, and national IDs. It helps businesses verify customer identities and prevent fraud.
🔹 Identity Verification API – An integrated service that allows businesses to verify users’ identities in real time, helping prevent fraud and ensuring compliance with KYC regulations.
L
🔹 Liveness Detection – A biometric verification technique that ensures a real person is present during identity authentication. This prevents deepfake attacks and identity fraud.
M
🔹 Mixing/Tumbling Services – Cryptocurrency services that obscure transaction histories to make tracing difficult. These services are often used for money laundering and illicit financial activities.
O
🔹 On-Chain & Off-Chain Analysis – The examination of blockchain transactions (on-chain) combined with external intelligence sources (off-chain) to gain deeper insights into financial activities.
🔹 OSINT (Open Source Intelligence) – The collection and analysis of publicly available data for intelligence gathering. It is widely used in cybersecurity, fraud detection, and financial crime investigations.
P
🔹 P2P Marketplace (Peer-to-Peer Marketplace) – A decentralized platform where users trade goods, services, or cryptocurrencies directly with each other without intermediaries. These platforms often require compliance solutions to prevent fraud.
🔹 PEP Screening (Politically Exposed Person Screening) – A compliance process that identifies individuals with political influence who may pose a higher risk of corruption or financial crimes.
R
🔹 Regulatory API Integration – A compliance solution that allows businesses to connect their systems with regulatory databases and automate compliance screenings.
🔹 Risk-Based Approach (RBA) – A strategy that prioritizes high-risk transactions or entities for closer scrutiny. This approach helps compliance teams focus on the most critical risks.
S
🔹 Sanctions Screening – Checking individuals, businesses, and crypto wallets against global sanctions lists to prevent financial transactions with restricted entities.
🔹 Social Media Intelligence (SOCMINT) – The process of gathering intelligence from public and private social media interactions to detect fraud, financial crime, and compliance risks.
🔹 Suspicious Activity Report (SAR) – A report submitted to financial regulators when a transaction exhibits signs of money laundering, fraud, or terrorist financing.
T
🔹 Third-Party Risk Assessment – The evaluation of risks associated with suppliers, business partners, or investors before entering financial agreements.
🔹 Threat Intelligence Feeds – Real-time data sources that provide insights on emerging cybersecurity threats, fraud schemes, and compliance risks.
🔹 Transaction Clustering – The grouping of related cryptocurrency transactions to detect patterns linked to illicit activities.