<\/span><\/h3>\nWhen meeting AML requirements, offering a structured AML policy framework is a priority task.<\/span><\/p>\nMoreover, AML policies must be validated efficiently by regulators, approved by compliance analysts, and reflect upon the organization’s risk tolerance and risk appetite.<\/span><\/p>\n<\/span>Advance Process Controls<\/b><\/span><\/h3>\nTailored and advanced process controls, integrated with risk assessment, fraud data, and management oversight, help your organization consider and react to several risks it comes across.<\/span><\/p>\nQuality process control practice includes examples:<\/b><\/p>\n\n- Constant review of data patterns and processes.<\/span><\/li>\n
- Engaging with suited cross-industry efforts<\/span><\/li>\n
- Incorporating a solid response plan plus an investigation process<\/span><\/li>\n
- Working on four eyes check<\/span><\/li>\n<\/ul>\n
<\/span>Utilizing AML Analytics<\/b><\/span><\/h3>\nMaking use of the augmentation platform and AML analytics involves promoting a new system into your legacy system (A system that still meets the requirements for which it was originally designed but doesn’t have scope for growth) to increase its shelf life.<\/span><\/p>\nThis plan of action bridges the gap between legacy and all-new technology. It offers 360-degree solutions that are cost-effective and less arduous. While adopting this strategy, ensure there exist no compatibility issues.<\/span><\/p>\n<\/span>Necessity to Update AML System<\/b><\/span><\/h3>\nOver time, upgrading the entire AML system is a must-execute process that every organization should follow.<\/span><\/p>\n<\/span>Upskill Staff<\/b><\/span><\/h3>\nTraining your staff is important for verifying the efficient implementation of CFT (Combating the Financing of Terrorism) and AML measures. Where upskilling an organization takes time, effort, and resources, advanced training on how to identify AML risks must be involved.<\/span><\/p>\n<\/span>KYC Strategies<\/b><\/span><\/h2>\nKYC strategies are operated by financial institutions to take in key customer information, assess risks, verify identities, and establish credibility. A few of the strategies below will help you build and strategize an effective KYC:<\/span><\/p>\n<\/span>Single Out Where and Why You Need KYC<\/span><\/span><\/h3>\nIt’s important to regularly implement KYC for all transactions, as a KYC check is a must-follow process to identify and verify the client’s identity when opening an account to prevent illicit activities.<\/span><\/p>\n<\/span>Determine KYC methods<\/span><\/span><\/h3>\nKYC methods help in preventing unlawful activities in banks, including terrorism funding, money laundering, and counterfeit trading.<\/span><\/p>\nConduct KYC due diligence checks on every existing and new customer to thoroughly verify their identity with techniques like <\/span>biometric authentication. <\/b>This technique uses facial recognition, fingerprint scans, and voice recognition to verify the identities of customers. These KYC\/AML methods are difficult to replicate and, thus, reduce the risk of fraudulent activities.<\/span><\/p>\n<\/span>Apply the Crucial KYC Components<\/span><\/span><\/h3>\nThere are mainly three main components of KYC compliance strategies, and they are:<\/span><\/p>\n<\/span>3.1 CIP – Customer Identification Program<\/b><\/span><\/h4>\nCIP offers its support to FIs by assuring that its customers are genuine. Risk assessment is one of the most important elements of an efficiently working CIP. CIP is an advisory entity that helps you decide what the level of risk is and which policy you must apply for that specific level.<\/span><\/p>\nFour types of data, including name, address, ID number, and date of birth, should necessarily be collected by financial institutions.<\/span><\/p>\n<\/span>3.2 CDD – Customer Due Diligence<\/b><\/span><\/h4>\nCustomer Due Diligence refers to a sequence of checks that help in assessing and verifying your customer’s risk profiles and their identities. During the CDD verification process, businesses must identify and verify customers or carry out KYC checks. Also, at this particular stage, businesses must not forget to define customer risk profiles.<\/span><\/p>\n<\/span>3.3. Ongoing Monitoring<\/b><\/span><\/h4>\nOngoing monitoring refers to a series of measures taken to regularly track and inspect transactions and adopt essential steps to lessen the risks. A key method to monitor transactions is <\/span>Suspicious Activity Reporting<\/b>.<\/span><\/p>\nSAR (Suspicious Activity Reporting): This process is mandatory for all businesses and financial institutions. Therefore, Fintech companies that function as a virtual currency industry or work as Money Services Businesses (MSBs) are subject to SAR filing requirements.<\/span><\/p>\n<\/span>Work on an Effective Risk Mitigation Strategy<\/b><\/span><\/h3>\nRisks can heavily hamper the financial transaction; however, if not addressed, these risks might negatively impact FIs. With the help of technological advancements and improved ID verification, it ensures a flawless onboarding process for the customers.<\/span><\/p>\nConsidering the effective risk mitigation strategy, these measures allow FIs to skim the challenging part of the onboarding system easily.<\/span><\/p>\nAlso, operational efficiency is heightened within the institutions because an automated KYC system helps in analyzing and processing massive amounts of data with more precision and in less time.<\/span><\/p>\n<\/span>Join Hands With an Identity Verification Company<\/b><\/span><\/h3>\nIf you want your business to be tamper-proof and allow it to avoid any extra costs and time, financial institutions should partner with an ID verification provider to streamline the process.<\/span><\/p>\nSuch partnering allows you to do business with or provide services to people whose identity is verified. In the majority of places across the globe, identity verification makes use of data, including address, DOB, and name, to determine whether an identity is real or fake.<\/span><\/p>\n<\/span>Takeaways<\/b><\/span><\/h4>\nConsidering the financial landscape today, KYC and AML compliance are fundamental, serving as vital tools in withstanding terrorist funding, money laundering, and other financial crimes.<\/span><\/p>\nThese are effective AML and KYC compliance strategies for fintech companies, banks, and other financial institutions that will protect your platforms from misuse.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"Money laundering is growing every year with the digital boom across the globe, and that’s why KYC and AML compliance strategies are something you need to know with these rising fraudulent activities. According to reports of a professional and reputed organization of fraud examiners – ACFE (Association of Certified Fraud Examiners) in 2022 claimed that…<\/p>\n","protected":false},"author":6,"featured_media":10366,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[33],"tags":[],"_links":{"self":[{"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/posts\/10365"}],"collection":[{"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/comments?post=10365"}],"version-history":[{"count":0,"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/posts\/10365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/media\/10366"}],"wp:attachment":[{"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/media?parent=10365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/categories?post=10365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/friendsoftoms.org\/wp-json\/wp\/v2\/tags?post=10365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}