Perpetual Know Your Customer (pKYC) - also known as continual KYC - is the ongoing process by which businesses continuously update customer information as a part of their risk management strategy and is a step on from a standard Know Your Customer (KYC) process. The latest concept within customer due diligence, pKYC is gaining traction because, not only does it offer a much more dynamic and secure risk management solution now but will automatically evolve as clients’ circumstances change thereby reducing risk and the level of period work required by regulated firms, which is why it is fast establishing itself as the future of KYC.
Leading anti-money laundering specialist SmartSearch has warned many businesses may be at risk of being in breach of GDPR rules, due to a lack of secure data hosting.
The end of May marked the third anniversary of GDPR becoming law in the UK, yet according to the RegTech specialist, regulated businesses in the legal, financial services and banking sectors risk non-compliance if they rely on manual customer records.
John Dobson, CEO at West Yorkshire-based SmartSearch said that even three years after the law was introduced, a lot of firms do not have procedures in place to protect customer details, which has been exacerbated with the disruption caused by the coronavirus outbreak.
In response to the concern, SmartSearch has enhanced its data hosting capability which updates customer details automatically when something changes, both increasing due diligence and data security.
Dobson adds: “Customer data hosting is something that can be overlooked, or businesses think the processes they have in place are good enough. But the fact is, even three years after the introduction of GDPR, a lot of firms still have manual records in the office, which poses a genuine GDPR risk.
“If you have a digital platform in place to carry out ID verification for AML purposes when onboarding new customers, it’s crucial that the data is hosted so that it updates automatically. And if there is a knock on the door from the auditor, a fully hosted system will make it quick and easy to pull a report which has everything on it necessary for compliance.
“Once the customer inputs their client data, they don’t need to do anything with it from an AML perspective, which enables them to forget about it and get on with the job of running their business.”