A Strategic Approach to Achieve Internal and Regulatory Compliance

KYC Compliance Support

The objective of KYC guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. With the Patriot ACT requirements, most of the organizations adopted a tactical approach to the Know Your Customer program and now are looking to move to a more strategic approach.

Standardized global KYC policies, creation of a single customer view, reusability of customer information, centralized workflow across KYC and on-boarding teams are certain practices implemented to ensure a more structured and efficient KYC process to assist achieve high KYC success ratios and a reduction in overall account opening timelines.

Challenges

  • ​Increased time to onboard and transact with clients due to unstructured KYC process, resulting in potential loss of business
  • Tackling continuously changing complex international patchwork of regulatory and legal requirements, while continuing to serve clients locally
  • Risk of facing significant reputational damage and potentially large fines if adequate controls do not exist
  • To institute a single view of the customer across different LOBs accommodating different KYC procedures adopted across the organization (especially for organizations with multiple LOBs with a global footprint)
  • Excel based workflow resulting in lower entity review success; cumbersome process prone to manual errors
  • Increased turnaround time due to poor coordination between teams i.e. Front Office, Compliance, On boarding, Reference Data and KYC

Solutions

  •  KYC Compliance Support
    • Collate and update customer information for different regions; Patriot Act data collection (objective to check legitimacy of new clients)
    • Perform additional wildcard search on third party sources like Bankers Almanac®, Lexis Nexis®, SEC Filings, etc. to ensure information accuracy
    • Liaise with FO/Sales teams to obtain missing documents from new clients to facilitate quick KYC set-up
  • Web based dashboards highlighting review success rate, pending approvals, RCA for non-compliant entities, etc.
    • Regular reports provided to client stakeholders to make informed decisions
  • Implement holistic assistance in creation of Global KYC hub with data elements that cater to the needs of the various local regulations in addition to the US Patriot Act requirements
  • Deploy customizable eClerx KYC tool to manage new setups and renewals as per risk and renewal cycle with detailed checklist of required documents per entity embedded within the tool to ensure complete documentation
  • Maker-checker workflow embedded within the tool to ensure 99.5% accuracy of data and evidences captured
  • Centralised workflow across KYC, On-boarding, Reference data, Front Office, Compliance teams for better coordination and communication

Benefits

  • Deep understanding of different KYC procedures and mandates
    • Manage and update information regarding Banks’ client accounts across 30 different client systems
    • Reviewed 200,000+ entities spanning 150 jurisdictions covering high, medium, low risk categories in 2011-12
  • Substantially reduce customer on-boarding time and costs
  • Complete and accurate data ensures the bank’s reputation is not compromised by high-risk clients
  • Achieved 100% scores during compliance and regulatory audits (offsite audit by bank’s L&C team) of a large US Investment bank
  • Comprehensive metrics highlighting review status, failures with root causes and remedial actions