Managing KYC risk assessment in a sea of increasingly complex data sets calls for smart automated solutions to manage alerts.
In recent years, AML and KYC requirements have become increasingly complex across jurisdictions, leading to significant geographical differences. Meanwhile, regulators around the world are increasingly placing the onus on financial institutions to uncover bad actors as they take a more systematic approach to preventing financial crime.
At the same time, fines against financial institutions for AML and sanctions violations are only increasing. Last year was the second biggest year on record for these types of penalties, with USD 8.35 billion in fines issued for non-compliance with AML, KYC and sanctions regulations, accounting for over 60% of total global penalties against financial institutions.
The threat of penalties – and the associated reputational and legal risk – has led to increasing demands from financial institutions for more effective and risk-sensitive onboarding and due diligence processes, highlighting a more fundamental need for greater operational efficiency in risk assessment processes.
Meanwhile, the Covid-19 pandemic has emboldened criminals to try to circumvent standard KYC controls at financial institutions to exploit economic uncertainty and remote working arrangements, as reflected in multiple warnings issued by financial regulators asking financial institutions to stay alert to emerging financial crime risks.
To add to this, global regulations around AML … [read more]