AML compliance: How phone number verification strengthens modern anti-money laundering programs  

Anti-money laundering (AML) compliance is a foundational requirement for organizations operating in regulated industries. As financial services, gaming, and digital platforms increasingly move online, regulators expect businesses to detect, mitigate, and report suspicious activity across fully digital customer journeys. 

At the same time, identity verification has become more complex. Fraudsters now rely on synthetic identities, disposable phone numbers, and automated sign-ups to bypass traditional controls. This puts pressure on compliance, fraud, and product teams to strengthen AML compliance systems without introducing unnecessary friction. 

This article explores what AML compliance means today, why it matters, and how mobile-first identity verification, specifically phone number verification AML workflows, supports modern AML programs. It also shows how Telesign’s Phone ID and Messaging APIs help organizations meet AML compliance requirements with real-time mobile intelligence. 

What Is AML compliance and why does it matter? 

At its core, what is AML compliance? It refers to the frameworks, controls, and technologies organizations use to meet anti money laundering compliance obligations established by global and regional regulators. These frameworks are guided by standards from the Financial Action Task Force (FATF) and enforced by bodies such as FinCEN in the United States and regulators operating under the EU’s Sixth Anti-Money Laundering Directive (6AMLD). 

An effective AML compliance program typically includes customer due diligence, transaction monitoring, suspicious activity reporting, and ongoing risk assessment. This approach is typically formalized within a structured AML compliance guide that defines how controls are applied across the customer lifecycle, from onboarding through ongoing monitoring. These measures ensure organizations can identify who their customers are, how they behave, and whether their activity aligns with legitimate use —often as part of a broader anti money laundering compliance program enforced across regions. 

Industries where AML compliance is critical 

AML compliance in banks has long been mandatory, but regulatory scrutiny now extends well beyond traditional financial institutions. Fintech companies, payment processors, crypto exchanges, and iGaming platforms all face AML banking compliance requirements due to their exposure to money movement and financial crime risk. 

For example: 

• Money transfer AML compliance regulations apply to remittance and cross-border payment providers. 

• Digital wallets and neobanks must enforce AML compliance requirements during onboarding and account changes. 

• Gaming and betting platforms face AML obligations related to bonus abuse, laundering through micro-transactions, and withdrawal fraud. 

Consequences of non-compliance 

Failure to meet AML regulatory compliance standards can result in severe penalties, including multi-million-dollar fines, license revocations, and reputational damage. Beyond regulatory consequences, weak AML controls increase exposure to fraud, account abuse, and operational inefficiencies that strain compliance teams and customer support resources. 

Role of phone verification in AML compliance 

Phone number verification AML processes support: 

1. Customer Due Diligence during onboarding 

During Customer Due Diligence (CDD), organizations must establish that a customer is who they claim to be as part of the KYC verification process used during onboarding. Phone number verification AML processes provide a foundational identity signal by confirming that a number is valid, reachable, and associated with a legitimate carrier. 

By verifying phone numbers during onboarding, businesses add an additional layer to customer identity verification that complements document and biometric checks, supporting API for identity verification within modern AML stacks. 

2. Enhanced Due Diligence for high-risk users 

Enhanced Due Diligence (EDD) applies to higher-risk customers or transactions. Here, phone intelligence becomes even more valuable. Indicators such as Voice over Internet Protocol (VoIP) usage, frequent porting, or prepaid SIMs can elevate risk scores and trigger additional verification steps using EDD verification tools. 

3. Ongoing monitoring and account changes 

AML obligations extend well beyond initial customer onboarding. Ongoing monitoring requires continuous assessment of account changes, suspicious behavior, and evolving risk profiles. Mobile verification for compliance allows teams to monitor phone number changes, detect SIM swap activity, and identify behavior that may indicate account takeover or laundering attempts. 

Importance of real-time mobile intelligence 

Unlike static identifiers, phone numbers generate real-time intelligence—location consistency, carrier changes, and reputation data—that supports proactive AML fraud detection and faster intervention. 

Telesign’s AML compliance capabilities 

Telesign delivers mobile-first identity intelligence purpose-built to support modern AML compliance systems across onboarding, authentication, and ongoing monitoring. By combining real-time phone number intelligence with secure messaging infrastructure, Telesign enables organizations to operationalize AML and compliance requirements within a scalable global KYC compliance program. 

At the core of this approach is identity proofing—establishing confidence that a user’s digital identity is legitimate, stable, and resistant to manipulation. Phone-based signals play a critical role in the identity proofing process, particularly in remote and high-volume environments where traditional checks alone are insufficient. 

Phone ID: Mobile intelligence for AML verification 

Telesign’s Phone ID API provides real-time intelligence that strengthens anti money laundering screening and digital identity verification at the point of onboarding and beyond. It enables organizations to verify phone number for AML purposes by analyzing attributes that are difficult for fraudsters to falsify at scale. 

Phone ID evaluates: 

• Phone number validity and reachability 

• Carrier and country consistency 

• Line type (mobile, landline, VoIP, prepaid) 

• Porting behavior and number stability 

• Risk indicators associated with disposable or high-risk numbers 

These signals support the KYC verification process by helping teams distinguish between legitimate users and identities associated with synthetic fraud, mule networks, or repeat abuse. As part of a broader AML compliance system, Phone ID helps organizations apply risk-based controls aligned with AML compliance policy and regional AML regulations—making it especially effective as a pre-eKYC check during early-stage onboarding.  

Because Phone ID integrates directly into onboarding and transaction flows, it supports early-stage identity proofing without introducing unnecessary friction—making it especially effective for fintech, crypto, and iGaming platforms operating at scale. 

Messaging verification APIs for possession checks 

Telesign’s Messaging API—SMS, RCS, and Voice—provides the delivery infrastructure required to confirm that a user controls the phone number they present. This possession check is a critical step in both digital identity authentication and KYC ID verification, particularly during account creation, step-up verification, and sensitive account changes. 

Used as part of a layered anti money laundering compliance program, messaging-based verification: 

• Confirms user presence during onboarding 

• Supports step-up verification triggered by elevated AML risk 

• Secures account recovery and credential updates 

• Reinforces auditability across AML and KYC workflows 

When combined with Phone ID, Messaging API enable organizations to move beyond one-time checks toward continuous verification—supporting compliance AML requirements while maintaining a streamlined user experience. This layered approach also helps teams clearly separate verification vs authentication, applying each control where it delivers the most compliance value. 

Technical specifications 

Telesign’s APIs are designed for seamless integration into existing AML compliance software and onboarding systems. 

• RESTful API architecture 

• JSON response structure 

• Returned data includes line type, carrier, porting indicators, and risk signals 

• Global coverage supporting international AML mandates 

• Low-latency performance for real-time decisions 

• Secure transmission using TLS 1.2+ 

• Enterprise-grade controls aligned with SOC 2 requirements 

These capabilities support scalable AML onboarding solution deployments across regions and industries. 

AML compliance and AI: Smarter risk detection 

AI plays an increasing role in AI for AML compliance, helping organizations detect emerging fraud patterns faster. 

Telesign applies machine learning to mobile data to: 

• Identify SIM swap activity and abnormal number changes 

• Detect patterns associated with synthetic identities 

• Enrich AML fraud detection models with behavioral metadata 

These insights can be integrated into broader fraud scoring engines, case management tools, or KYC AML API workflows to support faster, more accurate decisions. 

Industry trends and statistics 

AML enforcement and expectations continue to intensify as financial activity becomes increasingly digital and borderless. Regulators are placing greater emphasis on how organizations verify identity remotely, monitor risk over time, and demonstrate auditable controls across onboarding and account lifecycle events. As a result, AML programs are evolving from static, rules-based approaches into adaptive systems that rely on real-time digital identity signals—particularly mobile data. 

At the same time, fraud tactics are becoming more sophisticated. Synthetic identities, automated account creation, and SIM-based abuse are now common vectors for money laundering and account misuse. These trends have accelerated adoption of digital identity verification, API-driven AML compliance systems, and AI-powered risk detection tools that can operate at scale. 

Key industry indicators reflect this shift: 

• Global AML fines exceeded $6.6 billion in 2023, reinforcing the financial and reputational cost of weak AML controls 

• AML technology adoption is growing at a projected Compound Annual Growth Rate (CAGR) of over 16%, driven by automation, AI, and real-time risk assessment 

• Remote onboarding has increased reliance on digital identity signals, particularly phone number intelligence 

• The majority of digital banks now incorporate phone verification into CDD and broader anti money laundering screening efforts 

Together, these trends underscore the need for scalable, AML compliance API solutions that support continuous monitoring—not just point-in-time checks. 

Key features of an AML compliance API solution 

An effective AML compliance API solution must do more than satisfy regulatory checklists. It should integrate seamlessly into onboarding and authentication flows, support risk-based decisioning, and provide identity signals that remain relevant throughout the customer lifecycle. As organizations modernize their AML compliance systems, APIs play a central role in operationalizing compliance across products, regions, and channels. 

At a minimum, a robust anti-money laundering API should offer the following capabilities: 

• Real-time phone validation and risk analysis, enabling organizations to assess identity risk instantly during onboarding and account changes 

• Seamless integration into KYC onboarding process flows, supporting automated decisioning within existing KYC and fraud stacks 

• Carrier and line-type intelligence to help identify high-risk numbers such as VoIP, prepaid, or frequently ported lines 

• Scalable verification via SMS, RCS, and Voice, allowing teams to confirm user possession of a phone number when additional assurance is required 

• Global coverage, ensuring consistent AML controls across regions and supporting international regulatory obligations 

Together, these features enable organizations to implement mobile-first identity verification as a foundational layer of their AML compliance system, improving both regulatory outcomes and operational efficiency. 

Best practices for implementing AML compliance APIs 

To maximize the effectiveness of an AML compliance system, organizations should implement verification and monitoring controls that work together across onboarding and ongoing risk assessment. Modern AML and compliance programs increasingly rely on API-driven identity intelligence to support automation, consistency, and regulatory alignment—especially within a global anti money laundering compliance program. 

Rather than treating verification as a one-time requirement, best practices focus on continuous risk evaluation, layered identity proofing, and escalation paths that adapt as user behavior changes. When applied correctly, AML compliance APIs become a core component of an enterprise-grade AML compliance system designed to support scale, regulatory complexity, and evolving threat models. 

To maximize effectiveness: 

• Combine Phone ID with OTP-based verification for layered controls 
  Using phone number intelligence alongside messaging-based verification strengthens the identity proofing process by confirming both number risk and user possession. This layered approach supports the KYC verification process and improves resilience against synthetic identities and account misuse. 

• Monitor number risk signals over time, not just at onboarding 
  Continuous phone number assessment enables organizations to detect changes in risk that may indicate account takeover, mule activity, or evolving AML exposure. This supports ongoing anti-money laundering screening and reinforces digital identity verification beyond initial approval. 

• Align verification rules with regional AML laws and guidance 
  Configurable API-based controls allow teams to adapt verification logic to local regulations, supporting compliance AML requirements across jurisdictions and strengthening a global KYC compliance program. 

• Automate escalation to manual review when thresholds are exceeded 
  Automated workflows reduce operational burden while ensuring high-risk cases receive appropriate scrutiny. This hybrid approach balances efficiency with regulatory expectations for oversight within an AML compliance system. 

Embedding mobile intelligence early reduces downstream remediation costs as part of an enterprise AML compliance system designed for scale, while supporting consistent, auditable enforcement of AML controls. 

Real-world use cases: AML identity verification in action

Strengthening AML during digital onboarding  

Crassula.io, a fintech platform offering digital financial services, integrated Telesign’s phone verification to support AML compliance requirements during onboarding. By validating phone numbers and confirming user possession via SMS, the platform reduced exposure to automated sign-ups and improved AML auditability without increasing friction. 

Industry: Fintech 

Challenge: A digital financial platform needed to scale onboarding globally while meeting AML compliance program obligations and limiting exposure to synthetic identities. 

Solution: By integrating Phone ID, the platform assessed number type, carrier data, and risk indicators during onboarding. SMS verification confirmed user possession of the number before account activation. 

Results: 

• Reduced exposure to high-risk and disposable numbers 

• Improved confidence in AML screening decisions 

• Stronger auditability for compliance reviews 

Improving AML screening and account integrity  

Ubisoft implemented phone number intelligence to screen registrations and reduce fraudulent account creation. Using Phone ID, the company identified risky phone number patterns associated with abuse, improving compliance traceability and strengthening platform trust. 

Industry: Online gaming 

Challenge: A large gaming publisher faced abuse from automated sign-ups and fraudulent accounts, creating compliance and trust risks across its platform. 

Solution: Using Phone ID, the company screened phone numbers at registration to identify risky line types and abnormal patterns associated with fraud. 

Results: 

• Fewer fake and automated accounts 

• Improved AML audit trails 

• More efficient allocation of manual review resources 

Why choose Telesign for AML compliance? 

Modern AML compliance requires more than static rules or point-in-time checks. As digital transactions scale and onboarding becomes fully remote, organizations need identity signals that are continuous, adaptive, and resilient against evolving fraud tactics. Phone number intelligence provides a critical layer of defense—supporting KYC, EDD, and ongoing monitoring with real-time, mobile-first risk insights. 

Telesign brings over 15 years of digital identity and telecom expertise to AML workflows, helping organizations analyze risk with greater precision and confidence. Telesign APIs are trusted by global enterprises across highly regulated industries, where reliability, scalability, and auditability are non-negotiable. Built on an API-first architecture and enhanced with AI-driven intelligence, Telesign enables teams to move beyond manual reviews and static controls toward adaptive AML compliance systems that respond to risk as it emerges. 

By integrating Telesign’s Phone ID and Messaging  APIs into onboarding and monitoring flows, organizations can strengthen AML controls, reduce exposure to fraud, and meet evolving regulatory expectations—without introducing unnecessary friction for legitimate users. The result is a more resilient, future-ready approach to AML that aligns compliance requirements with modern digital experiences. 

Explore Telesign’s Phone ID and Messaging APIs to future-proof your AML compliance strategy—talk to our experts today. 

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