AML KYC is the acronym for Anti-Money Laundering and Know Your Customer. KYC identifies risk characteristics presented by customers and clients that increase the possibility of money laundering or financing of terrorism occurring. Identification of risk characteristics is through customer risk profiling. Manage AML/KYC through an AML360 secure Cloud account.
Customised
Use your existing client data to implement a profiling methodology.
KYC Register
Use the KYC register to filter data and produce risk reporting.
Risk Rating
All customers or clients are allocated an AML/KYC rating.
The acronym KYC stands for Know Your Customer. It is used in compliance with anti-money laundering laws. KYC requires customer profiling. A KYC profile enables a business to understand the risks the customer presents to committing crimes involving Money Laundering or Financing of Terrorism (ML/FT).
When a profiling methodology is adequately applied, results will identify the inherent characteristics that increase the likelihood of the customer engaging in ML/FT.
There are two parts to AML/KYC customer due diligence. The first part involves identity verification and screening. This part of AML/CFT compliance is understood well by most businesses. However, the second part of customer due diligence is poorly understood: risk profiling.
Customer risk profiling examines the nature and purpose of the underlying customer relationship. Also known as a customer risk assessment, profiling will produce a risk score. The risk score increases in line with the number of inherent ML/FT characteristics that are present in the nature and purpose of the customer’s account activity.
Sometimes referred to as transaction monitoring, ongoing due diligence identifies when the customer’s activity is unusual or suspicious. Reporting suspicious activity is the primary objective of AML/CFT laws.
To establish a KYC monitoring system, businesses need to incorporate product and service risk assessments, customer risk profiling and determine the rules of customer behaviour that should result in a red flag alert.
When a red flag is identified, the matter will be escalated to determine whether it is indeed suspicious or expected account activity.
KYC requires evidence-based records to prove obligations have been met with the implementation of customer risk profiling and ongoing monitoring.
Unless a business can produce these records, it will struggle to show it is adequately focused on AML/CFT compliance. Such failures increase the likelihood of a regulatory breach and, subsequently, a financial penalty.