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Know Your Customer & Customer Due Diligence

What does Know Your Customer (KYC) mean?

Know Your Customer, or KYC, refers to the checks firms need to perform on customers and potential customers before entering into a business relationship with them. Under the BSA/AML regulations & CDD Final Rule, all financial institutions in the US must have robust KYC processes in place to prevent identity theft fraud, money laundering and terrorist financing.

We can answer your questions about KYC and Customer Due Diligence

Know Your Customer (KYC), Customer Identification Program, (CIP) & Customer Due Diligence (CDD)

Understanding who your customer actually is is a process mandated by the US Patriot Act to prevent financial systems from being used for money laundering. The Customer Identification Program is the first step and involves verifying the identity of your client. Customer Due Diligence is the process of establishing the risk posed by the client to the business. a key element of this is screening them for Sanctions & PEPs, and understanding if Enhanced Due Diligence is required for greater scrutiny.

What steps are involved in KYC?

The first part of the KYC process is to verify the identity of the customer to ensure you know who they really are. The second step is to screen the customer against global PEP, SIP, RCA and Sanction lists to assess the risk they have to your business. Enhanced due diligence is an additional element if adverse information has been linked to the customer, this information must be reviewed in detail in case it prevents you from furthering the business relationship. Finally, to meet BSA/AML regulations, businesses must also monitor all customers in their database for any changes to the level of risk they pose.

What are the CDD and KYC requirements?

The BSA/AML Act requires that all US financial institutions have processes in place in order to detect, prevent and disrupt money laundering and terrorist financing. To do this, they must have robust CIP, CDD and KYC processes in place to verify customer identity and screen and monitor all customers on an ongoing basis to ensure they are not involved in suspicious activity.

How can firms meet their CDD and KYC requirements?

To meet CDD and KYC requirements, firms must verify the identity and screen customers using reliable and independent sources. With so much data to cross-reference, undertaking this process manually is hugely time consuming and open to error. Therefore, the quickest, easiest and most reliable solution is an electronic verification platform that can perform identity checks, PEP and sanctions screening, enhanced due diligence and ongoing monitoring all-in-one.

One platform for all your KYC requirements

SmartSearch is the only solution that can meet all your KYC requirements from one platform. Just enter an individual’s name, address, date of birth and social security number and, not only will the system perform a full identity check with Sanction and PEP screening, but will also trigger Enhanced Due Diligence on anything suspicious, monitoring all your clients for you on an ongoing basis. 

We help you stay compliant

Our user-friendly system enables team members at any level to perform identity & Sanction checks easily and effectively and, thanks to the fully integrated app, run checks remotely too. Every check is automatically saved to SmartSearch so we can guarantee you watertight record-keeping. SmartSearch can even run retrospective checks by uploading all your clients in one batch to ensure a complete compliance history. What’s more, the platform is constantly being updated and improved to ensure users never need to upgrade.
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