Importance of Achieving Perpetual KYC (Nickii Mallia)

In today’s world it is vital to adopt a continuous KYC (cKYC) approach rather than the inefficient costly periodic client reviews and remediation projects, to understand your customers’ risk profile throughout their relationship or lifecycle.

From the point a prospect approaches an organisation to be on-boarded as a customer and during the customer’s life cycle, KYC plays a significant role in the effectiveness of other compliance functions like sanctions screening, payment filtering, transaction monitoring for AML, fraud control and so on. Customer due diligence is vital to managing financial crime risks, so it’s not surprising then, that adopting a perpetual KYC (pKYC) is a pressing issue.

Switching to an automated KYC solution with a dynamic configuration engine that allows you to define, tweak and create your own processes and customer risk scoring, ensures you are able to adopt perpetual KYC by being proactive rather than reactive by continuously monitoring your customers. Switching from manual periodic KYC reviews to those that are triggered by anomalous patterns of customer behaviour, brings a totally new approach to how you do KYC.

All of the above and much more, ensures that at any point in time, you are aware of all the aspects of risk on all your subjects. This approach is the only approach that will always ensure that your reputation is safe-guarded from any risk. By continuously monitoring transactions, perpetual KYC provides peace of mind by raising an alert if an activity does not fall in line with what is expected. Once you adopt the perpetual KYC approach, you will wonder how you managed risk and compliance without it. This approach reduces risk but it also optimises use the of compliance teams and resources.

KYC is all about knowing your customer and ensuring that their behavior aligns with what they had declared and agreed, as part of their relationship with an organisation. Periodic reviews are a means to reset customer information and their anticipated activity.

Having a dynamic KYC solution which handles all the KYC aspects, workflows, processes, reviews and alerts can remedy some of the current challenges that organisations face and deliver some added benefits and peace of mind that data, both for newly on-boarded and previously approved customers, is perfectly in line with internal risk procedures, totally compliant with regulatory requirements and up-to-date at all times.