Impact of KYC Regulations on your Institution
Know Your Customer (KYC) is one area, if done right, would not only protect your institution from financial crime, but would also meet plethora of regulatory obligations. As an added benefit, it would allow you to manage your customer master data at one place and run analysis over it towards better managing risks as well as identifying newer business opportunities.
In order to meet all the following compliance obligations & to insulate your institution from current & future regulatory requirements, it is essential that you get a multi-dimensional perspective of your customers as per the KYC guidelines:
- Know Your Customer
- Know Your Customer's Customer
- Know Your Employee
- Know Your Intermediary, Partner, Correspondent Bank etc.
- Treating Customer Fairly
- Financial Product Suitability
- Fraud Detection
- Financial Crime
- Anti-Bribery
- Anti-Corruption
- Anti-Money Laundering
- Anti-Terrorist Financing
KYC is a common thread that runs through all of the above regulatory obligations and many others that are in the regulatory pipeline. The essence of KYC compliance is the establishment of an effective Customer Identification Program (CIP) within an organization, which is comprehensively managed within the KYCsphere toolkit. KYCsphere therefore ensures that your institution is compliant with various domestic & international customer centric regulations. KYC is essentially knowing those customers and their activities, which constitutes their relationships with your institution.
Manage Risk through the KYC Process
KYC fulfills a risk mitigation function under operational risk, if implemented under the risk based approach. The approach requires covering customer profile; products, services & delivery channels subscribed; activities & transactions performed and the geographies involved. The KYC process begins with the key requirement of checking that a prospective customer is not named in any watch/sanction/embargo lists of wanted money launderers, known fraudsters, financial criminals and persons belonging to terrorist outfits.
After name screening of the customer, attention has to be paid to any adverse news published against such individuals and entities. This is to be followed by an assessment of customer attributes on the basis of risk matrices. Higher risk customers have to be routed through enhanced due diligence and their transactions need to be monitored and alerts are to be generated if the customers' activities are not as expected. Finally, for suspicious activities, cases are to be created for investigation and once approved by the senior management, suspicious activities reports in desired type & formats need to be filed with the regulators or Financial Intelligence Units (FIUs). KYCsphere automates this entire process with necessary audit trails and retention of records, with added benefits of generating operational risk matrices.
Minimize Costs of KYC Compliance
KYC compliance, traditionally would include cost of firstly licensing or custom building a software application; purchasing hardware servers, their operating systems & databases to deploy the application & its database; downloading & cleaning multiple watch/sanction/embargo lists available in different formats; modifying the application every time regulatory changes warrant it, etc. These cycles of cleanings & modifications would have to be undertaken on an ongoing basis. Additionally, this compliance infrastructure would need IT personnel to maintain it and Operational & Compliance manpower to manage this environment. When you consider all other KYC compliance obligations as mentioned above, these sunk as well as recurring costs tend to start multiplying rather quickly.
What if you have an option that involves zero sunk costs & much lower operational costs to be compliant with a wide variety of KYC associated regulatory obligations? KYCsphere from Divas Software is such an option.
KYCsphere is deployed as Software-as-a-Service (SaaS) on Microsoft® Azure™ Cloud Platform-as-a-Service (PaaS) that is secure, reliable, and scalable. By leveraging Microsoft's cloud hosted compliance applications such as KYCsphere, application development, productivity, and collaboration tools, smaller and mid-sized businesses can immediately obtain the benefits of a larger infrastructure without having to deploy and administer it directly.
We take into consideration every aspect of your country's Know Your Customer (KYC), Anti-Money Laundering (AML), Counter Terrorism Financing (CTF) & other customer associated laws and regulations with which your organization must comply. If the law or regulation changes in any way, we will ensure that all necessary updates have been implemented into KYCsphere processes, without you having to incur additional costs of such enhancements. Therefore, in comparison to all the costs involved in deploying KYC compliance application at your premises, Microsoft® Azure™ Cloud deployed KYCsphere saves all these costs and goes on to pay for itself on the basis of cost of human effort saved, year after year.
Subscribe to KYC Toolkit that is Secure, Compliant & Economical
The application has been designed to handle various requirements at your headquarters along with all your branch offices. It could be further extended to your intermediaries & partners, in a secure manner. The application utilizes SSL connections, IP filtering, firewalls and intrusion detection and much more to ensure that your data is safe and secure, even from your own organization's internal threats.
KYCsphere's intuitive interface is easy to learn & use, quick to implement and remains updated with the latest regulatory requirements, thereby allowing you to focus on your core business activity. Multi-lingual versions of KYCsphere supports English, Spanish, French, German, Chinese, Japanese, Arabic and a host of other commonly used official languages around the world.
KYCsphere is a regulatory compliance toolkit, wherein each of the tool snap-fits with others in the suite. It is designed in such a way that you could start using it immediately by simply subscribing to the tools that help you in new customer on-boarding with all the necessary KYC documentation and combine it with filtering these customers against global and regional sanction/watch-lists. You could then incrementally keep adding additional tools to your subscription until you have automated all the functions to comprehensively comply with customer centric regulations of your country. We take care of all the updates and modifications without any costs to you, to give you secure, robust, flexible compliance at much lower Total Cost of Ownership (TCO) as compared to on-premise software applications.
The end users need a simple Internet browser with Internet connection to start working on KYCsphere Software-as-a-Service (SaaS) toolkit and kick-start regulatory compliance at your business. For using KYCsphere toolkit, you pay-as-you-go, just like the way you pay to an electricity or gas utility company.