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Exploring the Importance and Challenges of KYB, KYC, and AML Operations

Exploring the Importance and Challenges of KYB, KYC, and AML Operations

by | Apr 21, 2023 | AML - Anti-Money Laundering, Blog, iComply Insights, KYB - Know Your Business, KYC - Know Your Customer

Exploring the Importance and Challenges of KYB, KYC, and AML Operations

Are your fraud prevention protocols up to date with the latest Know Your Customer (KYC) and Anti-Money Laundering (AML) standards? In 2021, there was a 43% increase in fraud and computer misuse crimes compared to 2019, indicating that economic crime is on the rise. Having the right procedures and resources in place to prevent nefarious activities is essential for financial institutions and businesses.

With uncertain markets, ongoing global conflict, and a rapid influx of online banking users globally, 2023 has become a critical year for compliance legislation; failure to abide by evolving standards will likely spell even steeper costs for businesses than ever before.

At iComply, we know that using a proven KYC solution like our iComplyKYC platform is one of the best ways to streamline your operations and decrease your exposure to risk. As one of the leaders in identity verification and regulatory compliance, we’re proud to partner with clients across the globe to ensure you have everything you need to operate safely and efficiently. Below, we’ll take a closer look at some of the core elements that drive KYC legislation, as well as the benefits of using proven solutions like iComplyKYC.

What is KYC?

Know Your Customer (KYC) is a principle that refers to the practice of mitigating risk through the accumulation of verification-based information for unknown individuals and entities on a business level. From hiring new team members to securing a loan, adding a customer to your database, and more, KYC and AML protocols help to reduce the opportunity for criminals to conduct fraudulent practices and engage in nefarious activities like terrorist financing (CFT), human trafficking, the transfer of illegal products for financial gain, and more.

While KYC may not be a new concept (background checks have been an increasingly prevalent occurrence since the late 1970s thanks to both the Consumer Credit Protection Act and the Fair Credit Reporting Act), the constant push towards a more digital-centric existence makes being able to verify who you’re “working with” even more significant.

While each industry will have different points of consideration and corresponding legislation to accommodate when conducting KYC protocols, the end goal is to give businesses and their clients protection against fraud and other criminal acts that put the global marketplace at risk.

How Does KYC Mitigate Risk?

The unfortunate reality today is that international legislators and security watchdogs have yet to find a definitive method that completely halts the capacity for criminals to operate undetected in the financial sector.

While many of these crimes still go undetected, KYC and AML guidelines make it significantly harder for fraudsters to fly under the radar. By exposing fake users, flagging suspicious transfers, and performing other risk-reporting activities, organizations and regional legislators have a much better opportunity to address threats head-on and eliminate the misuse of funds or assets for nefarious purposes.

Addressing Global Challenges

One of the most difficult challenges facing the global regulation industry is pushing for the universal adoption of compliance guidelines, which, as mentioned above, currently differ regionally.

The EU and North America have the benefit of being able to leverage governing bodies like the FTC, Financial Action Task Force (FATF), Eurojust, Europol, and more, but not every country has embraced the need for KYC and fincrime prevention equally. This lack of balance presents regulators with a significant problem, as many of the highest-risk countries for illegal trafficking and fraudulent activity tend to have more relaxed (or an absence of) protocols that allow criminals to continue to operate unchecked with greater ease.

Though it may be easy to infer that financial crime is more centralized in such regions, the international community along with institutions that deal with financial and digital asset transactions must remember that rapidly evolving technology makes it more feasible than ever before for criminals to have a global reach. This makes compliance with KYC and AML protocols a necessity rather than a nicety; businesses need to be aware that failure to comply doesn’t simply result in fines, but can also lead to gateways for dangerous activities that affect the global community as a whole.

Why Partner With iComply

At iComply, we know the importance of having access to KYC protocols you can trust when it matters most. That’s why we’re proud to offer an innovative, modular-based suite of KYC programs that make it easy to stay compliant and adapt to evolving legislation.

iComplyKYC leverages cutting-edge AI and blockchain technology to ensure total regulatory compliance in over 245 jurisdictions worldwide and makes it easy to build fully-automated workflows for unique client types, jurisdictional requirements, and more with minimal downtime.

With a readily accessible 360º view of KYC data across your entire organization, you can move forward with confidence and know you are in the best position possible to combat fraud and financial crime and stay on the right side of KYC legislation in your region.

Ready to Discover More?

Contact us today to learn about iComply’s comprehensive, modular compliance solutions or to book a demo with one of our product specialists.

learn more

Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

Assessing Customer Risk with Automated KYB, KYC, and AML Software

Assessing Customer Risk with Automated KYB, KYC, and AML Software

by | Apr 21, 2023 | AML - Anti-Money Laundering, Blog, iComply Insights, KYB - Know Your Business, KYC - Know Your Customer, Solutions

Assessing Customer Risk with Automated KYB, KYC, and AML Software

With financial crime, fraud, and money laundering quickly taking precedence as some of the most aggressively expanding forms of crime across the globe, having a risk-based approach to monitoring your current customer base, as well as verifying the identities of new entities is essential to circumventing criminal activity and providing safeguards that allow users to navigate your institution with peace of mind.

A risk-based approach, as defined by the Financial Action Task Force (FATF) focuses on the identification, assessment, and understanding of money laundering and other types of financial crime through Customer Due Diligence (CDD) as well as Know Your Customer (KYC) protocols. When integrated into your regular securities framework and operations, KYC procedures can reduce costs, boost AML efficiency, and help contribute to a safer global marketplace for all entities to navigate.

Below, we’ll take a closer look at some of the key elements of taking a risk-based approach to evaluating entities and circumventing fraud, as well as the benefits of using a trusted KYC software provider like iComply to streamline your procedures. Read on to learn more!


What Are the Main Steps to Implementing a Risk-Based Approach?

While there are many different factors that contribute to taking a holistic approach to circumventing fraud, there are a few main variables that make up a solid risk-based plan. These aspects include:

Assessing Risk and Value

It comes as no surprise that the backbone of adopting a risk-based approach to AML involves painting a clear picture of the risk associated with certain customers through the development of detailed profiles that allow you to carefully, and accurately, segment clients as needed. Core components that help assign a risk value include your ability to verify their identity and/or financial information, known activities and patterns of behaviors that may cause concern, geographical location, and more.

Should a prospective customer raise cause for concern, you should also have refined Enhanced Due Diligence (EDD) protocols in place that allow you to dig deeper and clarify any missing variables that would allow you to make a definitive decision before moving forward.


Efficiency and Practicality

While manual reviews can solicit valuable information about clients, they are often non-practical in fast-paced business environments that demand results as quickly as possible to avoid downtime and inconvenience for users. Automated AML and KYC platforms not only help to eliminate accidental biases and the risk of human errors, but they also streamline your operations and allow you to seamlessly conduct AML screening in a significantly faster (and much more reliable) manner.

At iComply, we believe that taking a risk-based approach to KYC and AML doesn’t have to mean long wait times and further headaches. Our innovative suite of modular risk assessment software puts compliance in your hands with ease, integrating with existing security frameworks in a matter of minutes and adopting regulations across the globe for maximum protection and compliance.

Evaluating on a Micro Level

When countering finCrime and the many risks associated with criminal activity, there is no denying that it’s important to be aware of the macro-level effect such efforts have on the global marketplace, including reducing human trafficking statistics, combatting the international drug trade, circumventing terrorist financing, and more. With that being said, it’s just as important to look at the successes garnered on a micro-level, with businesses and institutions understanding that their efforts must focus specifically on an individual customer level to stay as compliant and accurate as possible. Clearly identifying parties within your own unique database plays a key role in both micro and macro efforts to reduce the harm of finCrime, and ensure that your institution will always be on the right side of compliance laws in the process.

What About Assessing Dynamic Risk?

Risk, much like the customer data it is attached to, is not a stagnate prospect. Companies and institutions that only conduct KYC and AML measures when new accounts are opened miss one of the most important parts of crime reduction. It should always be anticipated that customer information will change regularly, with new details like new associations and behaviors directly influencing their actual level of risk. Inaccurate risk scores fuelled by outdated information pose a serious risk to AML efforts, and it is estimated that including continuous review measures like transaction monitoring and customer, screening can reduce your risk of misclassifying your risk profiles by 25-50%.

Dynamic risk assessment, that is, assessing the risk that arises from sudden events in real-time, gives your company the power to pivot as needed at the moment and deal with the very real challenges associated with handling high-profile clients like PEPs and more.

Implement a Proven Risk-Based KYC Approach with iComply

At iComply, we know that compliance with KYC and AML legislations is essential to circumventing the rise in financial crimes across the globe and avoiding fines from international legislators. Our modular suite of KYC, KYB, and AML products not only ensures you have everything you need to manage and maintain a wide range of jurisdictional AML regulations and conduct risk-based assessments but also automates your customer identification and risk screening processes more intuitively than ever before.

Book a demo with our team today to learn more about iComply’s AML solutions and discover how iComplyKYC can be customized to fit the unique risk screening needs of your organization.

DISCOVER ICOMPLY

learn more

Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

Thomson Reuters Marketplace Selects iComply as a KYB, KYC, and AML Partner

Thomson Reuters Marketplace Selects iComply as a KYB, KYC, and AML Partner

by | Apr 27, 2021 | AML - Anti-Money Laundering, Blog, In The News, KYB - Know Your Business, KYC - Know Your Customer, Press Releases, Solutions

New Thomson Reuters Marketplace Selects iComplyKYC as a Digital Identity and KYC Partner

Thomson Reuters has launched its Marketplace, featuring a curated selection of software solutions for law firms, corporate law offices, and tax and accounting professionals

Vancouver, B.C. – April 27, 2021 – iComply Investor Services (“iComply”), a global compliance software provider, is announcing that the company has partnered with Thomson Reuters to distribute its iComplyKYC platform through the Thomson Reuters Marketplace. 

iComplyKYC gives businesses access to a turnkey, world-class know your customer (KYC), anti-money laundering (AML), and identity access management (IAM) solution that can be quickly embedded into any digital experience. 

The Thomson Reuters Marketplace is an online store that showcases a wide range of solutions offered by Thomson Reuters, as well as its trusted and tested vendors such as iComply. 

“With the pandemic driving business more online, financial processes that used to require face-to-face interaction are becoming digital,” said Matthew Unger, CEO of iComply. “The internet was developed to transfer information and so the policies of user identification and identity access management have followed internet industry standards. As more banks digitize, new fintechs emerge, and major tech companies enter financial services, these internet standards fall short of the regulatory requirements. iComplyKYC solves this by combining “banking grade” KYC portals with your existing identity access management, single sign-on, or digital identity management solutions.”

Existing digital solutions force users to submit their most personal details into a web form for user identification or authentication, with API-based solutions relaying this information to third-party data processors and sub-processors that are often international and could retain control of the data. Other existing alternatives to these API-based solutions require significant resources to implement and maintain, such as custom software development.

“iComplyKYC helps businesses securely and digitally collect, verify, screen, and maintain data and documents for both natural persons and legal entities,” said Matthew Unger, CEO of iComply Investor Services.

“Unlike existing digital KYC solutions, the platform uses edge computing and artificial intelligence to process sensitive user data locally, before it leaves the user’s device, which helps organizations comply with local data privacy laws across jurisdictions.”

iComplyKYC is a next-generation, web3 ready, KYC solution that is built from the ground up to support true data privacy and can be deployed within minutes. All of this is designed to save clients money on implementation and ongoing maintenance while allowing operations teams to gain a 360-degree view of identity resolution, KYC and AML compliance, and ongoing access management.

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About iComply Investor Services Inc.
iComply Investor Services Inc. (“iComply”) is a global compliance software provider that helps businesses reduce the cost and complexity of user authentication KYC and AML operations while providing a seamless experience to their users. iComplyKYC allows operations teams to centrally control how each KYC portal will securely gather, validate, and encrypt client data and documentation before it leaves their device. By partnering with multinational technology vendors such as Microsoft, DocuSign, Thomson Reuters, and Refinitiv, iComply is bringing compliance teams into the digital age. Learn more: www.icomplyis.com

Thomson Reuters Marketplace Selects iComply as a KYB, KYC, and AML Partner

iComply Launches Digital Compliance Administration Platform for $181 Billion KYC and AML Market

by | Dec 15, 2020 | AML - Anti-Money Laundering, Blog, KYB - Know Your Business, KYC - Know Your Customer, Press Releases, Product Updates, Solutions

iComply Launches Digital Compliance Administration Platform for the $181 Billion KYC and AML market

The updated iComplyKYC platform leverages edge computing and AI to support onboarding and identify verification for legal entities and natural persons

Vancouver, B.C. – December 15, 2020 – iComply Investor Services (“iComply”), a global compliance software provider, is announcing that it is launching an updated version of its iComplyKYC platform for digital compliance administration that now supports the onboarding and authentication of legal entities and natural persons as a part of its all-in-one compliance solution.

Unlike existing electronic identification (e-ID) solutions that require tools from multiple vendors and manual processing for B2C and B2B customer due diligence, iComplyKYC offers a standalone system to manage the full lifecycle of KYC and AML administration for each client.

Globally, AML spend by financial services providers grew to over $181B USD a year in 2019, according to a 2020 report from Compliance Week.

“The latest directives from the Financial Action Task Force (FATF) have broadened AML requirements to include law firms, accounting, eCommerce, luxury sales and M&A transactions,” said Matthew Unger, CEO of iComply. “Further, new requirements for work-from-home have complicated the day-to-day compliance operations of most of the market, and ‘digital first’ is no longer a nice-to-have, but a necessity.”

Remote workforces and lockdowns have forced businesses to implement digital solutions for client onboarding, identification, and AML risk management.  iComplyKYC can service law firms, accounting firms, eCommerce platforms, mortgage brokers, and other industries regulated by the AML-5 directive. iComply estimates the global AML spend will exceed $300B USD by 2022.

The platform leverages edge computing for GDPR, PIPA, PPIA, and CCPA risk management. This means that the updated iComplyKYC platform enables companies to gather, authenticate, and encrypt user data via dynamic KYC Portals before that data leaves the user’s device. 

KYC services on the platform also include AI-enabled identity verification, biometric authentication, DUNS, and GLEI validation, supporting document workflows, and AML screening across 150 million daily sources. Compliance teams can access all results in a single dashboard to make better decisions, quickly manage issues, and generate reports.

“Integrating edge computing and artificial intelligence into the KYC portal reduces the total cost of compliance and improves user privacy, cybersecurity, and straight-through processing capabilities,” added Unger. “Businesses can no longer afford to mess with half a dozen onboarding tools and APIS, the market needs a banking grade digital identity and risk management solution that can be set up in hours.”

About iComply Investor Services Inc.
iComply Investor Services Inc. (“iComply”) is a Regtech company that provides fully-digital KYC and AML compliance solutions for non-face-to-face financial and legal interactions. iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience. By partnering with multinational technology vendors such as Microsoft, DocuSign, Thomson Reuters, and Refinitiv, iComply is bringing compliance teams into the digital age. Learn more: www.icomplyis.com

Fireside Chat: Navigating the Complexities of Beneficial Ownership

Fireside Chat: Navigating the Complexities of Beneficial Ownership

by | Nov 5, 2020 | Blog, Events, iComply Insights, KYB - Know Your Business

Fireside Chat: Navigating the Complexities of Beneficial Ownership

Date: Thursday, November 26, 2020 | 10am PST – 1pm EST – 7pm CET

 

Customer due diligence on the ultimate beneficial ownership (UBO) of a legal entity is a complex and time-consuming process.

Definitions of a UBO varying greatly across jurisdictions, opaque company structures, and the lack of verifiable entity ownership data from trusted sources—all these factors create significant challenges for compliance teams, especially when transacting with corporations across several countries.

Join our live November fireside chat, “Navigating the Complexities of Beneficial Ownership: The Challenges of UBO Due Diligence“, as we host industry thought leaders and experts to discuss: 

  • The process of gathering, evaluating, and validating data from UBOs against trusted sources
  • Differentiating between % of ownership and % of control
  • Challenges of international UBO identification
  • Best practices in customer due diligence for remote, non-face-to-face transactions

 

We welcome you to join us for this free Fireside Chat on November 26th at 10am PST / 1pm EST featuring a live panel of trusted experts from around the globe. 

Register today!

GUEST PANELISTS

Gene DiMira | Chief Identity Officer, The AML Shop

As one of Canada’s leading voices in the anti-money laundering industry and digital identification space, Gene has designed, implemented, and sustained AML/ATF programs digital identity programs both nationally and internationally. His background in systems, operations, and compliance controls spans financial planning firms offering securities, banking, and insurance products. His compliance focus progressed with Manulife, where he most recently served as the Head of Global Compliance AMLATF program. He currently volunteers with several organizations such as the DIACC Outreach Expert Committee, ACAMS International Sanctions Task Force, and the International Institute of Finance’s Digital Trust Initiative. 

 

Dimitrij Gede | Founder, Anagram Compliance

Dimitrij has held specialized roles within the Luxembourg banking sector which have given him a robust perspective on the vital nature that regulation plays within traditional and decentralized markets. Dimitrij has extensive experience in compliance monitoring programs, screening and AML/KYC procedures, and client onboarding while keeping abreast of regulatory changes and identifying potential exposures to organizations. Adept in project management and problem resolution, he led the creation and management of a KYC department for a major German bank and liaised with several international partners to ensure that the bank’s KYC procedures enabled smooth client onboarding.

 

Matthew Unger | Founder & CEO, iComply

Matthew Unger is the founder and CEO of iComply. After exiting a successful wealth management firm at 26, Matthew has become a recognized thought leader in fintech and regulation with over a decade of experience in advisory and technical positions in Canadian financial technology. Matthew has studied blockchain, AI, and Business Strategy at MIT. He is an active member of DIACC, Surfrider Foundation, and is an internationally recognized public speaker on fintech regulation and compliance. As an author, Matthew has been published in The Economist, Forbes, and Finance Magnates.

About iComply
iComply Investor Services Inc. (“iComply”) is a Regtech company that provides fully-digital KYC and AML compliance solutions for non-face-to-face financial and legal interactions. iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience. By partnering with multinational technology vendors such as Microsoft, DocuSign, Thomson Reuters and Refinitiv, iComply is bringing compliance teams into the digital age. Learn more: www.icomplyis.com

 

Fireside Chat: From Nomination to Verification – How to Digitally Onboard a Corporation

Fireside Chat: From Nomination to Verification – How to Digitally Onboard a Corporation

by | Sep 30, 2020 | Blog, Events, iComply Insights, KYB - Know Your Business

Fireside Chat: From Nomination to Verification—How to Digitally Onboard a Corporation

Date: Thursday, October 22, 2020 | 10am PST – 1pm EST – 7pm CET

 

Seamless onboarding is critical to building trust with new clients, providing the foundation of a solid relationship. But in a digital-first world, clients expect non-face-to-face meetings for their health and well-being.

Corporate KYC, also known as Know-Your-Business (KYB), has become a critical process in determining high-risk corporate clients and learning where organizations can take steps to mitigate any potential fraud or illicit activity from impacting their bottom line.

From receiving company documents to verifying ultimate beneficial owners, how can you be sure that your screening and onboarding processes are properly screening for all risk factors while continuing to build a relationship of trust with your corporate clients?

Join “From Nomination to Verification: How to Digitally Onboard a Corporation“, our live fireside chat with industry experts and thought leaders to discuss:

  • How to better identify risk factors when onboarding your corporate clients
  • What regulators require from you when verifying corporate entities 
  • How to choose the right vendor partners for onboarding and screening
  • How technology is changing the game for compliance teams in a contactless world

Join us for this free Fireside Chat on October 22nd at 10am PST / 1pm EST featuring a live panel of trusted experts from around the globe. 

Register today!

GUEST PANELISTS

Chris Gschwend | Senior Compliance Advisor, MME

Chris Gschwend advises corporate clients in the areas of anti-money laundering, trade controls, sanctions, and customs management. She specializes in the implementation of FinTech and traditional compliance programs and has over 10 years of experience in managing global compliance teams in the aerospace and manufacturing industries. Chris Gschwend also brings public sector experience, having developed trade policies and negotiated free trade agreements for Canada Customs (CBSA).

Amber Scott | Founder & CEO, Outlier Compliance Group

Amber has broad-based financial compliance experience that includes insurance, mutual funds, and banking. In addition to being a Certified Anti-Money Laundering Specialist (CAMS), Amber is also a Certified Privacy Professional (CIPP). She also holds a mutual fund sales designation from the Investment Funds Institute of Canada (IFIC) and a first level Fellow, Life Management Institute (FLMI).

Gueorgui Gotzev | International Counsel, Kohler Gotzev

Gueorgui has a broad academic and operational experience in capital markets, bank & finance, alternative investment funds, distributed ledger technology (DLT), and Virtual Asset Services Providers (VASPs). He helps restructure, digitalized, optimize, and outsource any part of a fund’s investment management and central administration burdens. He loves consulting on process optimization and investor onboarding automation, KYC, AML/CFT, and CRS/FATCA compliance. Gueorgui holds an LL.M. in International Financial Law from the University of Paris 1 – Panthéon Sorbonne and has completed a full qualification course in Luxembourg law (CCDL) from the University of Luxembourg.

About iComply
iComply Investor Services Inc. (“iComply”) is a Regtech company that provides fully-digital KYC and AML compliance solutions for non-face-to-face financial and legal interactions. iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience. By partnering with multinational technology vendors such as Microsoft, DocuSign, Thomson Reuters and Refinitiv, iComply is bringing compliance teams into the digital age. Learn more: www.icomplyis.com