CYBER compliance

Understanding who your customers are 'KYC' is a vital process for banks and money exchange companies. is a Due Diligance service for customer complaince departments and money transfer businesses which provides due diligance reports upon online entities who wish to obtain banking and e-commerce merchant processing accounts to process Visa, Mastercard and other credit cards. We unravel the networks behind entities who sometimes try to hide the real nature of the business they are in!

KYC Intellegince

KYC companies

Merchant services providers will interact with a wide range of companies, businesses and activities. They will have customers from all sectors, and probably all sizes depending on the terms of service they offer. As such, they will need the flexibility to work with very different money flow schemes and particular needs, as well as the knowledge to determine the best way to work with each client. 

Merchant services apply to all sorts of businesses, which is possitive, since it allows providers - mostly banks - to target a wide demographic, while at the same time it does have its risks. Not all businesses are legal and not all activities are legitimated. Practices outside of the law, like illegal trafficking, gambling, illicit activities and others of the like will also require some sort of merchant platform to process their transactions, so there is a chance that if you own a bank that provides those services, they will come knock your door sooner or later.

KYC Businesses

In order not to get involved with illicit activities, you must train your personnel to identify suspicious customers and develop a KYC (Know Your Customer) scoring system based on information required from all customers. There is Know Your Customer Guidance provided by many different governments and organizations in a combined effort to fight money laundring and other forms of fraud and illegal transactions.

KYC Process

Nobody running an illegal business will come to you stating it openly. They will all forge lies and even whole masquerades with fake businesses and shell accounts to hide their true intentions. It is your job as a provider to verify how legitimate these businesses actually are. This is your duty as established by the law, but also your responsibility with your own business, as taking dangerous clients could get you caught in illegal affairs, in trouble with the police - with all the losses it means - or force you to deal with people you would rather not deal with at all. KYC rules are established as a protocol to request background information from merchant customers, in order to get a clear picture of their real intentions and activities. The result of these protocols are KYC Reports that are submitted to the bank's competent authorities in order to decide what to do with the application. In case there is something suspicious about the customer, the bank might be required to submit those reports to an authorized entity, usually a government body linked to the police.

These governments offer free access KYC Tools and guidelines for bank entities to use, but those are not the only resources available. These guidelines might vary from country to country, as well as the entities to which you are obliged to submit suspicious customer behaviour, but the general idea behind them is still the same, so the differences you should bear in mind are more about entities and reports than the procedure itself. For example, banks must comply with the OFAC about due diligence in the United States.

KYC services

Tools and guidelines provided by governments are in some cases enough for banks to get a clear picture of what to do with due diligence, but it is important to note that those aren't the only resources at your hand. You can also hire a company specialized in running deep backround research on your potential merchant customers, so you can access detailed records of their history, both with their businesses and their personal activities, in the search for any sign of alarm. This is an extra expense, of course, but the cost of making a mistake is so much higher that it's well worth the investment.

KYC Investigations

Of course, you don't need to run a deep background research in all cases. Most customers are legit and will cause no trouble derived from fraud or money laundering. A routine search, which is due dilligence, should be enough in most cases. However, this due dilligence can rise some red flags pointing at suspicious activity or even a suspicious customer background. In these cases, it is indeed worth it to run a deeper research, and even requested in most cases by the law itself. 

Peculiar transactions, odd sudden changes of business area, purchases or transactions with seemingly no connection with the business's area, and customers wtih empty or stained records are especially suspicious. It is in these cases that you should pay more attention. Run a deeper annalysis and ask more questions. The price for overlooking these details might be too high for you and your own business.

KYC Cyber Compliance is a Cyber compliance company with a stong focus on avoiding relationships with compaines who have history which is not in the same sector as they purport to be in!

KYC Compliance

Financial institutions are among those with the longest lists of requirements when it comes to compliance with regulations. With every new client or new transactions comes significant risk. It is for this reason that all financial institutions are required to carry out thorough research on their clients before approval.

KYC or “know-your-customer” simply refers the steps that these institutions take to find out more about their clients. The information collected includes the following:

• The full and accurate identity of the client

• The true nature of the client’s activities

• The accurate presentation of any risks that maybe associated with the client

It is for this reason that due diligence is conducted before a client is approved for any financial service, followed by ongoing monitoring of all transactions based on set thresholds.

KYC Knowledge and Policy

All financial institutions are tasked with collecting, reviewing and storing documentation and data on their customers (existing and new) to ensure compliance with set regulations as declared in the Financial Crimes Country Database. The purpose of knowing the customer is to identify any missing attributes, gather additional information as may be needed. Other than to comply with regulatory frameworks, this knowledge allows the financial institutions to re-use the stored data for other legal obligations as per Countries/Jurisdictions of Primary Concern.

KYC Approval and Compliance

It is always important to understand the legalities surrounding collecting data that complies with the set financial regulations. You need to know the kind of information you are required to collect so as to reduce the bulk of data to be managed while ensuring compliance. 

You can use the AML/KYC regulatory frameworks such as EMIR, FATCA or MiFID 2 as per the set KYC Policy. For rule based compliance, the institutions should have a checklist of documentation and data to be collected so as to fully comply with regulatory obligations. This checklist should have measurable such as;

• Documentation required and data to be collected

• The specific KYC questions that should be asked

• The regulatory frameworks to be complied with

• The risk assessment to be undertaken

• The data classifications that need to be completed

The institution can have automated systems that ensure compliance by checking the data collected against the checklist. This makes it easy to spot any data that is valid/out dated, what is missing as well as acknowledge the information already collected.

KYC Investigation and Data Scanning

It is important to note that incomplete client profiles are deemed incompliant to set regulations as stipulated in the Bank Secrecy Act AML Risk Assessment. As such, it is vital to weed out profiles that are lacking the required information, identify how and when the data should be collected and keyed in. 

It is prudent for financial institutions to have targeted workflows that enable automation of client documentations and data capture. For instance, these systems allow the clients to submit the necessary information on self-service portals with the help of user-friendly platforms.

The automated self-service portals not only enable better communications with clients, they also allow timely submission of up-to-date information securely and conveniently. This enhances collection of accurate, real-time information validation. When the client is logged on to the check list, collected and processed with the supporting documentation is more accurate.

KYC Verification

Once all the information has been keyed in, it is important to verify the data collected against the documentation presented. Under no circumstance should sensitive data be taken up as truth without first authenticating the accuracy of the information submitted. It is important to contact relevant offices for confirmation of the data submitted.

Once all the data has been duly collected and verified, the institution can now classify the client or counterpart in accordance with the regulation. This enables the department tasked with compliance (mostly auditors) to screen the evidential documentation. In an automated system, the team only handles the exceptions left out by the rule-based compliance system.

Once the client profile is complete, it is important to propagate this data throughout the firm. This can be achieved by updating key banking systems using the integration tools, which mostly come with enhanced due diligence KYC systems. 

Once in a while, it is important to review customer data. In addition to verifying compliance to regulatory frameworks, the exercise can help update client data, which gives a more accurate perspective of the client at any given time. The updated information can also help in upselling profitably or help exploit cross-selling opportunities.

Parting Shot

Financial institutions are required to effectively screen all customers as well as new applications. The screening is done to weed out negative lists, restricted parties as well as high risk parties so as to comply with the set industry best practices and policies.

Regulatory data, in particular, takes center stage as financial institutions strive to implement solid foundations in data collection and management upon which rigorous compliance initiatives are built.