Financial regulations are necessary to ensure the safety of both consumers and financial institutions. The recent growth in FinTech industries has led many countries towards adopting new AML checks, which apply specifically with cryptocurrency transactions as well! KYC stands for Know Your Customer.
It’s an acronym that refers not just individuals but also companies who want more information about how their business operates so they can avoid any potential problems down the line. But what does this really mean? One thing you might notice when looking up your favourite band on YouTube is lots Of Intelligent video content popping-up before ours or other users’ screens containing advertising logos.
KYC is the process of verifying your customer’s identity. In order to use our service, you will need ID documents like passports or driver licences with it so that we can make sure who is asking on behalf of what they say their name actually be at any given time (and not just when buying something). For example: investors must always submit proof before participating in an initial coin offering–even if only half way through building out their frozen fund-pooling settlement plan! And people opening bank accounts have been known to still require Proof too – like having two recent utility bills addressed directly.
What is AML?
The AML practice of financial institutions and governments is broader than KYC, referring to measures used in order to prevent or combat criminal activities such as money laundering. Financial policies have been created that comply with local regulations; these are part of an overall anti-money laundering compliance program which includes a number steps including staff training on how they should respond if presented with suspicious activity reports (SARs).
The process of identifying who is buying from you and what they might be wanting does take some time, but in return for this effort there are many benefits: better understanding customers’ finances which helps management risk efficiently; plus we’re protecting ourselves against criminals trying to use our identity verification system (aka “fines”) as cover-up fraud!
KYC Procedure: Customer Complete (CDD) and increased complete test (EDD).
Risk -based AML policy;
Sustainable risk assessment and sustainable monitoring;
AML Compliance Training Program for staff;
Internal control and internal audit.
Customer Deamen Datience (CDD) is a basic KYC process in which customer data such as evidence of identity and address are collected and used to evaluate customer risk profiles.
Enhanced Complete Test (EDD) is a sophisticated KYC procedure for high -risk customers. In general, customers are classified in the high -risk category after the CDD is vulnerable to money laundering and terrorism financing. Therefore they are arranged and monitored according to specified norms.
The EDD procedure includes verifying the ownership information of the main benefits (UBO) and people who are exposed to politics (PEP). Transaction monitoring is also a key element of EDD.
How Automation improves KYC / AML Compliance
AML software is a cost-effective and efficient way to combat money laundering. The Anti–Money Laundering solution analyzes customer data for discrepancies, while also quickly detecting suspicious activities like rapid increases in funds or withdrawal of large sums of cash at one time from an account holder’s perspective .
The need to comply with Anti money laundering KYC laws has become an essential part of running any bank. This is because failure can result in hefty fines, other penalties that may be imposed by regulators or even worse-but only if they find out about it! The reputation lost as well will affect your company deeply for years into the future should this problem go unchecked; so make sure you’re doing everything correctly now before things get too far gone already.
