Know Your Customer (KYC) is a customer
Identification mechanism implemented by banks as a critical first step in
Anti-Money Laundering (AML) compliance. Due to the high-risk banks face from
numerous transactions, they have many AML compliance requirements. Banks are
among the most answerable stakeholders of the financial systems and also
well-positioned to prevent financial crime.
Banks should, therefore, establish a KYC and AML
system with useful and reliable policies and procedures. Nevertheless,
technology evolvement is rendering such systems ineffective. This is despite
banks followed AML and KYC regulations. Regulations are sufficient for now but
wanted the institutions to push their compliance boundaries and accommodate
issues like technology.
These institutions should, therefore, ensure that
they maintain the integrity of their business. Otherwise, they risk the
security of their institutions. Workable processes and well-communicated
standards must be put in place. This article is a guide for the best KYC and
AML practices.
Read more: KYC and AML Practices that All Banks Should Adopt
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