Glossary
Forty terms, defined without vendor fog
The vocabulary used across this site and in your regulator's rulebook, written so a product manager and a compliance officer can agree on what a word means.
A to Z
Terms
Definitions are practical rather than legal. Specific obligations always come from your own regulator's rulebook.
KYCKnow Your Customer
Identifying and verifying an individual customer before and during a business relationship, and keeping evidence of how that was done.
KYBKnow Your Business
The same discipline applied to a legal entity: registry confirmation, ownership structure, controlling persons, and screening of the humans behind it.
KYTKnow Your Transaction
Monitoring activity after onboarding: transaction rules, wallet exposure, and behavioral patterns that identity checks cannot see.
AMLAnti-Money Laundering
The overall control framework for preventing, detecting, and reporting the movement of illicit funds.
CDDCustomer Due Diligence
The baseline set of checks applied to every customer: identify, verify, understand the purpose of the relationship, and monitor.
EDDEnhanced Due Diligence
A deeper set of checks applied when risk is elevated, typically adding source of funds, source of wealth, adverse media review, and senior sign-off.
SDDSimplified Due Diligence
A reduced set of checks permitted for demonstrably low-risk relationships, where the risk assessment supports it.
UBOUltimate Beneficial Owner
The natural person who ultimately owns or controls an entity, reached by walking the ownership chain through intermediate companies.
Controlling person
Someone who exercises control without necessarily holding shares: a director, signatory, or person with power to appoint management.
PEPPolitically Exposed Person
Someone entrusted with a prominent public function, along with their close associates and family members, who therefore carries elevated corruption risk.
Sanctions screening
Matching a subject against sanctions regimes and watchlists. A match is a legal event, not a score input, and requires resolution before proceeding.
Adverse media
Negative news screening for financial crime, fraud, and related allegations, resolved by an analyst rather than treated as an automatic decline.
False positive
A screening alert that turns out not to be the subject. The rationale for discounting it must be recorded, not just the outcome.
Match resolution
The documented process of confirming or discounting a screening hit, with the analyst, evidence considered, and reasoning stored on the case.
Liveness detection
Proving a real person is physically present at capture rather than a photo, screen replay, mask, or generated video. Passive runs invisibly; active asks for a challenge.
PADPresentation Attack Detection
The specific capability of detecting spoofing artifacts at the point of capture, tested independently against known attack instruments.
Injection attack
Feeding synthetic media directly into the capture pipeline, for example through a virtual camera, instead of presenting it to a real camera.
Face match (1:1)
Comparing a live selfie against the portrait on the verified document to confirm they are the same person.
Face search (1:N)
Searching a face against a population of previously verified faces to find duplicates or previously rejected applicants.
NFC chip read
Reading the contactless chip in an e-passport or eID and validating the issuer's signature, so the data comes from the authority rather than an image.
MRZMachine-Readable Zone
The encoded lines at the bottom of a passport or ID card, containing checksums that reveal many alterations immediately.
Proof of address
Documentary evidence of where someone lives, subject to accepted document types and a maximum document age set by policy.
Age assurance
Establishing that someone meets an age threshold, either by document or by biometric estimation, collecting the least data that answers the question.
Risk score
A weighted numeric output combining check results and attributes. Useful only if you can see which factors moved it and by how much.
Risk band
The label a score maps into, such as low, medium, or high, which drives routing, refresh intervals, and the depth of due diligence.
Reason code
A stable machine-readable explanation of why a decision landed where it did, so downstream systems and reviewers do not have to guess.
Referral
A session that needs human judgment. A first-class outcome, distinct from a decline, and the mechanism for keeping automation honest.
Four-eyes principle
A second, independent person approves a consequential outcome. The reviewer who escalates cannot be the approver who closes.
Ongoing monitoring
Continuous re-screening and re-evaluation of an existing customer as lists, ownership, and behavior change over time.
Periodic review
Scheduled refresh of a customer file at an interval set by risk band, repeating only the checks that have gone stale.
SAR / STRSuspicious Activity or Transaction Report
A report filed with the financial intelligence unit when suspicion is formed, supported by the case evidence that led to it.
Travel Rule
The requirement for originator and beneficiary information to accompany a virtual asset transfer above a threshold, including where the counterparty is an unhosted wallet.
VASPVirtual Asset Service Provider
A licensed business conducting virtual asset activity: exchange, transfer, custody, or related services.
Unhosted wallet
A wallet controlled directly by a person rather than by a service provider, which changes how counterparty information can be obtained.
Wallet exposure
The risk profile of an address based on the counterparties it has transacted with, expressed as categories rather than a single opaque score.
Audit trail
An append-only record of every decision, access, configuration change, and export, with actor and timestamp, retained for the required period.
Evidence bundle
Everything behind one decision packaged for inspection: captures, per-check signals, timings, versions, and the decision trail.
Data residency
Where data is physically stored and processed, and which jurisdictions can compel access to it. Distinct from where a vendor is headquartered.
Data minimization
Collecting only the data needed for the stated purpose, and deleting it when the purpose and retention obligation end.
Reusable identity
Re-using an existing verified identity for a new relationship or product instead of repeating verification from scratch, with the provenance recorded.
Where a term carries a defined legal meaning in a specific rulebook, that definition governs — the statutory definition in your own rulebook.
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