KYC Alliance

Providing KYC Excellence

The Challenge
Know Your Customer or 'KYC' has become a synonym for due diligence in the financial industry. The UK Proceeds of Crime Act and Money Laundering Regulations together with the EU Directive on Money Laundering have caused financial institutions to revamp KYC policies and procedures, moving from a basic identification approach to more comprehensive, risk-based identification programs. The future EU Markets in Financial Instruments Directive (MiFID), which comes into force in November 2007, is also set to make KYC policies much more stringent.
Penalties for non-compliance can be severe and include massive fines. Regulators have already taken action and the press has been littered with stories of company fines in excess of £100m. Complying with KYC regulations is essential to protecting a financial institution’s reputation, which in turn is critical both to maintaining current business and generating future market share.

Elements of a KYC Strategy
To be truly effective, the elements below should be adopted on a consolidated basis, encompassing your parent company or head office and all foreign branches and subsidiaries.

Customer acceptance policy- Develop clear customer acceptance policies and procedures that include guidance on the types of customers that are likely to pose a higher than average risk to your organisation.

Customer identification-Establish a systematic procedure for identifying new customers, with standards on which records are to be obtained and retained for customer identification on a global basis.

Risk management- Implement risk management on a global basis and include proper management oversight, systems and controls, segregation of duties, training and other related policies.

On-going monitoring of higher risk accounts -Ensure policies and procedures exist for monitoring account activity for unusual transactions on a global basis

Introducing the KYC Alliance
No one technology vendor or consultant can provide financial institutions with an end-to-end KYC solution. This is why, as leading vendors in our field, we have come together to form the “KYC Alliance”. The alliance is made up of edge IPK, Mobius Management Systems, Morse and Sun Microsystems.
Together we understand the issues of KYC and can provide an end-to-end solution for helping you implement a robust and scalable KYC solution

Contact the alliance for more information.