Recent headlines remind us all too well that, despite some organizations’ best efforts to curb customer identification program (CIP) violations, gaps remain in the monitoring and oversight of Know Your Customer (KYC)/Anti-Money Laundering (AML) practices at some of the most sophisticated financial services organizations.
Traditional anti-money laundering systems are falling behind against evolving threats. AML compliance officers are instead turning to new tools and technologies to deal with unwrapping immature processes, expanding regulation, administrative complexity, and false positives.
TransPerfect’s technology and resources play a critical role in enabling the expansion of these capabilities and reducing the level of effort to stay compliant in multilingual and multi-jurisdictional onboarding and refresh environments.
Processing KYC Data
At some scale, all banks and money handlers bear the obligation of performing customer due diligence (CDD) to verify the identity of entities with whom they transact. In the interest of permitting as many legitimate transactions as possible—whether at inception or at designated change events in the life of the relationship—adequately and efficiently verifying this data is critical to complaint operations.
For the customers that present an elevated risk—politically exposed persons (PEPs), specially designated nationals (SDNs), or other high risk entities—the process of enhanced due diligence (EDD) requires a deeper dive into documentation of greater complexity and detail from a variety of sources; in most cases, of origins not related to the institutions' language or record.
There is a balance between depth of evaluation of the clients’ artifacts—such as IDs, articles of incorporation, deeds, trusts, or other—into English and the speed required to decide whether or not to authorize a client’s transaction or request. To fulfill the timeliness requirements of KYC programs, efficient processes, equipped with appropriate automation, are critical to KYC verification programs.
Importance of KYC
As the global money laundering and terrorist finance watchdog, the Financial Action Task Force (FATF) sets the global standard of AML/KYC protocols. Thirty-seven individual countries and two regional organizations are signatory members of the body currently, with over 200 total jurisdictions committed to the recommendations.
According to AML Intelligence analysis, “295 total FinCrime fines totalling €8.7BN were doled out in 2021.” Although this represents a reduction from 2020’s record-breaking €20B in fines, the CEO of AML Intelligence notes that, “It may be too early to say that AML defences in the big banks are impacting the flow of dirty money through the banking system. However, they are now spending record amounts on financial crime compliance."
The more organizations that are identified to have, or potentially have, violations, the more rigorous the effort to prevent these episodes from recurring. The inevitable conclusion is that banks are better served funding a multilingual process instead of risking fines.
TransPerfect has shaped 24/7/365 multilingual authentication operations for leading financial services organizations around the world. This includes bespoke data identification workflows, encrypted technology, and a network of globally trained resources that support more than 170 languages working around the clock.
To find out how we could help your finance-related organization, contact us today.