Moving toward evidence-based AML compliance: Analysing the new Federal Reserve proposal

The US Federal Reserve has introduced a new proposal to shift anti-money laundering (AML) compliance strategies from traditional methods to more evidence-based approaches. This move aims to improve the effectiveness of AML frameworks by focusing on data-driven insights rather than broad, one-size-fits-all regulations. The change is significant as it reflects a broader trend in regulatory practices to leverage technology and analytics for more precise and efficient oversight, potentially reducing unnecessary compliance burdens on financial institutions. This shift could set a precedent for other regulatory bodies worldwide to adopt similar evidence-based practices.