Step 1: How well do you know your customer?
The best place to start is at the very beginning
Have you taken a look at your customers’ profiles lately? If not, it might be time to step up your AML compliance and win back the title of ‘Responsible FI of the Year’. An ongoing maintenance of your customer database is crucial to preventing illegal transactions because you never know when Money Laundering and Terrorist Financing might come knocking on your vault door.
KYC reviews, not unlike audits, are conducted on a regular basis; the frequency depends on the risk-pool categorization of the client. In order to eliminate confirmation bias, we start the Refresh Process with a review of material from the internal database.
- Case Number
- Customer Type
- Present and Future Risk Rating
- Line Description
- Reviewer Information
A brief overview of the KYC status gives authorities a snapshot of the case information at a single glance. The summary that follows begins by establishing the entity/individual identity geographically and financially.
Subsequently, a history of reviews is provided with special mentions of SAR or CTR history pertaining to the entity. This information is verified and validated through an internal audit conducted on the customer database. Reviewers must also specify whether prior issues have any bearing on the current update.
If an entity is being reviewed, beneficial ownership is highlighted with a brief about their concurrent holdings and liabilities.
Resources & Findings
All the information collected in this section is obtained from the existing customer database. In this phase we verify the digital footprint on record such as existing websites, and related organizations such as holding companies or other global concerns.
Gathering all the basic information sets apart the knowns from the unknowns. However, ‘red flags’ are not raised at this stage as it is considered to be more of a baseline or guiding stage for the rest of the review.