Creating a comprehensive KYC programme

Previously, we discussed adverse information, and the need for a comprehensive Know Your Customer (KYC) programme. So, what exactly should companies include in their AML programmes to ensure that they have a complete overview of any adverse information against their potential customers and partners?

Of course, it’s crucial to include all news media in a search. This means traditional news and media – newspapers and TV reports, both from your business’s home country and from overseas – and blogs and digital media. News is no longer reported just in print, so incorporating social media and alternative news outlets can help provide new avenues for finding reports about corruption and fraud.

Businesses should also make sure to include high-risk watchdogs in their programmes. Organisations like the International Consortium of Investigative Journalists, Transparency International and Freedom House provide regularly updated lists of suspicious individuals and companies that can help businesses identify potential conflicts before they take on a new customer.

Sanctions and Watch-Lists are also a vital part of any AML search. Analysts should search lists published by U.S. departments, such as Treasury, Commerce, and Justice, as well as those from the EU, UK, Canada, Australia and other key FATF countries. Regulatory filings and databases, like SEC and FINRA disciplinary actions can also be an important source of adverse information, as they contain reports on violations and penalties that may of interest in an AML investigation.

Businesses should include international organisation databases in their programmes as well. Interpol’s Wanted Person list is a good example, as it can provide information on suspicious persons wanted in other jurisdictions. Lists of high-risk business registrations, like registered Money Service Businesses, casinos and other entities considered at-risk by AML compliance professionals should also be a key feature of any comprehensive KYC programme.

Getting a complete picture of money laundering risk

From this list, it is clear that searching for adverse information entails far more than simply checking the daily newspaper or carrying out a Google search. And, in order for any programme to be truly effective, due diligence officers need to carry out investigations regularly, even once a person has become a customer in order to spot any potential issues as soon as they arise. This can be an onerous burden for analysts to take on.

However, there are technological solutions now that can support due diligence teams in meeting the demands of increasingly rigorous legislation, and protect the businesses they’re working for. Kompli-Global’s Kompli-IQ, for example, deploys artificial intelligence (AI) to replicate the performance of the very best due diligence analyst. The tool carries out thorough searches and uncovers new sources of adverse information while maintaining a high level of service for every search. It works 24 hours a day, seven days a week, automatically applies appropriate filters and ranks sources according to their reliability, all helping to minimise false positives.

Moreover, when adverse information is detected, Kompli-Global’s ‘digital compliance assistant' “Samantha” is able to alert the right people immediately so they can take action straight away. This round-the-clock monitoring lifts the weight of manual due diligence from busy compliance operations.

With such tools at their disposal, due diligence officers can ensure they are truly digging down into the full range of adverse information. In doing so, they can make sure they are playing their part in tackling the issue of international money laundering, protecting their business and the wider economy.


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