Customer Due Diligence & Know Your Customer
Finding an adequate balance between meeting the regulatory requirements and keeping the customers satisfied is one of the main challenges financial institutions may meet.
- Do the Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures in your organisation meet the regulatory requirements across all jurisdictions the business operates in?
- Are the KYC and CDD up-to-date?
- Is the burden too high for new customers to enter?
- Is there an efficient information exchange between your business units and departments?
- Is there a risk-based approach in place aiming to tighten surveillance for the high-risk customers?
- Do you have a sufficient level of knowledge to determine the ultimate beneficial ownership (UBO) of your corporate customers?
- What are the benefits and the challenges of outsourcing or reliance inside or outside of your group?
Following the same approach for all customers may be expensive and ineffective. Treating all customers the same may cause either loss of low and medium risk customers due to overly heavy diligence procedure or may not detect the high-risk customers that may cause money-laundering issues.
Initial customer due diligence and ongoing due diligence are key to assess and mitigate the potential money laundering and terrorist financing risks, and the anonymity in the provision of payments shall not be accepted.
Therefore a fundamentally different approach when gathering, analysing and interpreting the data in a high level of quality and quantity shall be used. The correct CDD and KYC process shall ensure that the right balance and approach is in place prioritising the highest risk sectors and identifying the gaps within the current processes.
