TACKLING FINANCIAL CRIME WITH PERPETUAL KYC

R&C: As part of the fight against financial crime, how important is it for financial institutions (FIs) to truly understand their customers?

Cotter: As part of the fight against money laundering and other financial crime, it is paramount for financial institutions (FIs) to truly understand their customers. While initial identity and verification is a vital part of anti-money laundering (AML) and compliance programmes, the only way FIs are able to assess the inherent risk associated with each customer is through enhanced knowledge, deep customer understanding and real-time data. Using a perpetual know your customer (pKYC) approach – which is the process of analysing transaction patterns, financial history and behaviour combined with real-time data on risks such as sanctions – FIs can identify potential red flags that are indicators of illicit activities such as money laundering or fraud. They can also ensure that if an individual or entity is on a sanctions list – or added to one once already onboarded – they are immediately aware. By taking a proactive approach, FIs are able to meet their legal obligations, mitigate risks effectively and prevent financial crimes before they occur.

Jul-Sep 2024 Issue

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