bankingciooutlook

KYC Analytics in Anti-Money Laundering: Key to Legit Business Transactions

By Banking CIO Outlook | Tuesday, August 20, 2019

Know your CustomerThe trend of conceptualized KYC in AML is emerging as a top precedence for financial organizations to avoid criminals who can successfully hide the unlawful origins of their cash.   

FREMONT, CA: Amid the growth of blockchain-based Know Your Customer (KYC) solutions, businesses are putting its weight behind its centralized KYC registry, opening it up to corporate. As financial companies build long-lasting brands, it aims to be associated with exceptional service and economic prosperity. To keep pace with tactics of money laundering perpetrators, banks have innovated by cultivating sturdy anti-laundering practices and policies. AML should be the top priority for the finance industry. The to-do list for any financial administrator is undoubtedly intimidating. From navigating technology advances to managing talent efficiently, many initiatives are striving for attention. AML practice is more widespread, and it refers to stratagems used by financial companies and governments to restrict and combat financial crimes, particularly money laundering and terrorism financing.

Using AML software in an organization’s AML approach is far more advantageous in terms of costs and efficiency. Anti-money laundering solutions interpret customer data and review it for inconsistencies. The software can also instantly detect suspicious activities like accelerated increases in funds or withdrawal of considerable sums of cash in the customer’s accounts. Electronic KYC or automated procedures begin by assembling the client’s essential data using Electronic Identity Verification (eIDV). It selects the evidence of identity document type and uploads a photo of the selected document. Then it uploads a photo of them holding the selected evidence of identity. With advancements in eIDV procedures, the KYC process can be accelerated. It has gotten more reliable, convenient, and secure for both businesses and customers.

A financial institution’s AML management forms part of its more comprehensive AML compliance program and should be strengthened to comply with the obligations of its local AML regulations. Many institutions often obscure the lines between KYC processes and AML practice, and as a result, acquire regulatory fines. KYC, as practiced, is just the identity verification process, which is identifying the client. Its principal objective is to understand consumers better and their financial dealings, handling risks efficiently. There are several factors which have brought anti-money laundering primarily to the forefront in recent years. Enforcement operations compared to AML have been on the acceleration, and criminals are using more complicated means to stay undetected, including insider information, globally-coordinated technology, and e-commerce schemes. AML events put a financial institution’s prominence on the line. Compliance team have various touchpoints encircling a customer to gather and confirm the information. Perhaps not surprisingly, one in three financial organizations have lost potential consumers due to incompetent or slow onboarding methods. It’s no wonder AMC has now become a top preference for many CEOs in the financial business.  

A systematized KYC process, in-person verification for AML compliance, non-acceptance of external cheques is unavoidable measures that are assigned to safeguard against money laundering. While some of the methods may seem unwieldy, it helps in creating financial transparency, which is an indispensable priority in the fight against money laundering and criminal methods. Complying with AML and KYC laws has become a practice every bank has to follow. To comply with these specifications, asset management institutions seek to identify dubious transactions by comprehending their consumers and understanding the argumentation behind the transactions they carry out. Failure to comply with the rules results in substantial fines and other penalties by regulators and an extensive blow to the reputation of the offending financial organization.  

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