AML compliancemust be balanced with data protection lawssuch asGDPR (EU), CCPA (U.S.), and local banking secrecy laws.

Option B (Correct):Data minimization ensures financial institutions only collect and retain essential customer dataneeded for AML compliance.

Option C (Correct):Regularly updating data processing policies ensures compliance with evolving data protection regulations.

Why Other Options Are Incorrect:

Option A (Incorrect):Unrestricted access to customer data increases privacy risksand canviolate GDPR and other data protection laws.

Option D (Incorrect):AML data must not be repurposed without regulatory justification, asGDPR requires data usage to align with its original collection purpose.

Best Practices for Managing Data Privacy in AML Compliance:

Restrict access to AML data on a need-to-know basis.

Implement strong encryption and security controls for customer data.

Ensure all AML-related data collection aligns with privacy regulations.