EU Anti-Money Laundering Regulation: New KYC standards from 2027

The fight against financial crime in Europe is at a pivotal moment. The new EU Anti-Money Laundering Regulation (AMLR) will replace the current patchwork of national regulations with a directly applicable 'single rulebook'. From 10 July 2027, the Regulation will largely come into effect, harmonising the due diligence obligations for all obliged entities across the Union.

For companies in the DACH region, this means fundamentally overhauling their onboarding processes. While the German Money Laundering Act (GwG), BaFin’s previous administrative practices, and FINMA regulations in Switzerland previously provided the framework, the focus is now shifting towards European standards. In particular, remote identification's role is being redefined due to its close integration with the eIDAS Regulation.

This affects not only traditional financial institutions, but also a wide range of new market entrants who are now coming under the scrutiny of European regulators. Swiss institutions face an additional challenge in that they must align their processes not only with national VSB and FINMA circulars, but also take into account the requirements for AMLR and eIDAS compliance to gain access to the EU market.

The paradigm shift: from national laws to the EU Anti-Money Laundering Regulation

Until now, anti-money laundering measures in Europe have relied heavily on directives that had to be transposed into national law by individual Member States. This resulted in a fragmented regulatory landscape: while BaFin in Germany imposed very specific requirements on the video identification process, the FMA in Austria prioritised different aspects.

The EU Anti-Money Laundering Regulation puts an end to this situation. As a regulation, it applies directly in every Member State, eliminating the need for national transposition. The aim is to achieve a uniform level of security. This transition is accompanied by the establishment of the new EU Anti-Money Laundering Authority (AMLA), which is based in Frankfurt. In future, the AMLA will directly supervise the highest-risk cross-border financial institutions. However, this will increase the risk of compliance breaches, as the frequency of audits and the potential sanctions will rise significantly.

eIDAS-compliant identification as the new standard

A key element of the EU Anti-Money Laundering Regulation is the preference for technological solutions offering the highest level of security. In consultation paper EBA/REP/2025/35, the European Banking Authority (EBA) clarified that electronic identification methods will become the standard for remote identification in line with the eIDAS Regulation.

These procedures use state-verified identities, such as the online ID card in Germany or comparable systems in Austria, and offer 'substantial' or 'high' levels of security. For obliged entities, this means that the digital onboarding of customers must primarily rely on these eIDAS methods. This development is closely linked to banking regulation, which is increasingly calling for automated, tamper-proof identity hubs.

The future of video identification under the EU Anti-Money Laundering Regulation

One of the most hotly debated changes to the EU Anti-Money Laundering Regulation is the video identification procedure. Previously, under BaFin's guidance (Circular 3/2017), a video chat with a trained member of staff was standard practice. However, under the AMLR, video identification has been downgraded to a 'fallback option'.

According to the draft regulatory technical standards (RTS on Customer Due Diligence), the use of video identification will only be permitted from July 2027 if:

1. No eIDAS solution is available: This applies, for example, to customers from third countries whose identity documents are not yet NFC- or eID-compatible.
2. The measure is disproportionate: If the use of eID procedures or reading via an NFC interface would constitute an unreasonable obstacle for certain user groups.
   

Even if these conditions are met, obligated parties must comply with strict safeguards in accordance with Article 6 of the RTS CDD. These include high-resolution video transmissions, AI-supported real-time document authenticity checks, and comprehensive documentation explaining why the primary procedure was waived.

In practice, this will significantly reduce the relevance of video identification, while automated processes such as NFC identity verification and other video identification alternatives will become more important. National administrative guidelines, such as BaFin Circular 3/2017, would therefore lose their guiding role, being superseded by European technical standards. Consequently, the EU Anti-Money Laundering Regulation will also influence BaFin’s regulations.

Beneficial owners: Extended data reporting requirements for businesses

Under the EU Anti-Money Laundering Regulation, due diligence does not end with the identification of the direct contracting parties. There is a strong emphasis on the transparency of ownership structures. The Regulation tightens the definition of the beneficial owner (Art. 51 et seq. AMLR) and, in some cases, lowers the thresholds for determining control.

The list of data to be collected in future is particularly important for compliance officers in the DACH region. A simple extract from the transparency register is no longer sufficient. Obligated entities must in future collect and verify the following data points:

• Full identity details: All first names and surnames, place of birth and date of birth.
• Residence & nationality: Full address and all nationalities held.
• Official identifiers: Number of the identity document and the personal identification number (e.g. tax ID).
• Ownership structure: A detailed description of the sources and the chain of control (including the date from which the beneficial interest has existed).
  

Any discrepancies between a company’s own investigations and the data held on the register must be reported to the relevant authorities within 14 days. For many companies, this means reviewing existing customer relationships and re-verifying beneficial owners, particularly in the case of complex holding or trust structures. Depending on the transaction, an AML check must also be carried out.

Impact on the DACH region and Switzerland

Although Switzerland is not an EU member, the Regulation indirectly affects the financial centres of Zurich and Geneva. Swiss financial institutions serving EU clients must adapt their processes to the new AML Regulation standard.

In Germany and Austria, the direct application of the EU Anti-Money Laundering Regulation means national exceptions are being largely phased out. The role of BaFin and the FMA is shifting towards consistently enforcing EU requirements. Those still relying on purely national solutions today risk losing regulatory interoperability within the EU from 2027 onwards.

Scalable identification solutions from PXL Vision

The technological complexity of the new EU Anti-Money Laundering Regulation means partners are needed who can translate regulatory expertise into automated software. PXL Vision provides the necessary platform to ensure a seamless transition to the eIDAS standard.

As the AMLR requires eIDAS-compliant procedures to be used primarily, PXL Vision supports companies in implementing NFC-based identification and automated verification processes.

Our solution is designed to map both the 'substantial' security level and the specific safeguards for fallback scenarios. Automation enables obliged entities to efficiently capture the required data points without increasing onboarding drop-out rates. At the same time, an audit-proof audit trail is created, enabling them to demonstrate to supervisory authorities such as the AMLA or EBA why a particular identification procedure was used at any time.

Guidance for business practice

Although 10 July 2027 may seem a long way off, the technical and organisational transition to the EU Anti-Money Laundering Directive should begin in 2026. Businesses must evaluate their existing customer data sets and check whether their current identification records meet the new requirements.

The EU Anti-Money Laundering Directive is an opportunity to raise identity processes to a new level of security, not merely a bureaucratic hurdle. Harmonisation will facilitate cross-border business within Europe – provided the appropriate technological standards are adopted. In the future, the combination of eIDAS compliance and efficient risk management will determine which players can operate successfully in the European financial market.

FAQ on the new EU Anti-Money Laundering Regulation (AMLR)