Steps for KYC/AML Compliance

Almost all commercial organisations need to prove that they have taken steps to understand where their customers money originates before starting work. The information gathered and steps taken are different for each organisation and need to reflect the level of risk. Delivering the forms, stages, risk algorithms, escalations, approvals and integrations requires software that can be be customised to meet each requirement and consultants who can work with you to deliver a complete and easy-to use solution

Define the client and your team

Before any work can be carried out for a paying customer, details of the client, and their organisation if they are working for a company, need to be captured. The owner of the work and their manager need to be recorded and may be used in any escalation process. The work profile, country where the work will be performed, type of organisation, details on the source of the work and proof of provenance will be used as part of the risk profile.

Conflicts checking and Beneficial Owner identification

Some processes, such as checking that the client hasn't worked with your organisation previously, are only required in certain types of organisation such as professional services firms. Capturing details on each beneficial owner can also depend on how this is defined for the type of work being carried out. Documents such as passports, records of incorporation and even screen prints of Google searches can be scanned and stored as part of the identification process. Beneficial owners need to be checked against sanctions lists held by the EU and other bodies

Risk assessment, escalations and declarations

Once the details on the work have been collected, the client work needs to be classified as high or low risk. The method of calculating risk needs to be defined by your organisation as well as the paths taken in either case. For example low risk work may be accepted automatically at this stage while high risk items are forwarded to the manager or higher for further discussion.

Engagement letters, account creation and rejection

If the risk is deemed too high then your prospective client needs to be informed of your decision. If the risk is within acceptable limits then an engagement letter that represents the type of work and level of risk needs to be signed by your new customer. Once the customer has agreed to the terms, the details can be entered into your accounts system and possibly forwarded to your DMS and CRM along with the identification documents