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Real-time and Always on: The Benefits and Challenges of Perpetual KYC

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Monitoring risks to companies during the onboarding of clients can be time-consuming and costly. Nevertheless, it’s an essential effort, demanded by regulators and expected by stakeholders who want to ensure their investments are protected.

By streamlining the process, the impacts of know-your-customer (KYC) monitoring on corporate bottom lines and productivity can be reduced. Technology has enabled real-time always-on monitoring, known as perpetual KYC (pKYC), which can be embedded into workflows to automatically check, log and verify changes to assessment targets.

But there are challenges as well as benefits to its introduction, as A-Team RegTech Insight’s next webinar will discuss.

“The integration of the new technologies with existing technologies poses key challenges,” says Enton Nikaj, a veteran KYC and anti-money laundering (AML) professional who has worked at Bank of China and Barclays. “It’s the integration, holistically, of the information that comes from outside sources with the systems that banks use.”

Nikaj will be joined in the September 15 webinar by Dr. Artur Golban, deputy director of compliance at Victoriabank and co-chair for the ACAMS Eurasia Chapter, as well as Alex Zuck, managing director for product strategy and KYC at Moody’s Analytics.

Costs and Returns

The webinar, entitled ‘Perpetual KYC: Compliance as the Source of Better Business’, will also look at why companies should begin their pKYC journey, how they should go about it, and examine useful RegTech products, services and techniques.

Questions will be fielded from an audience of RegTech and data providers as well as financial institution consumers.

Financial crimes expert Nikaj, who has 17 years’ experience working in AML, KYC and banking secrecy, says pKYC is best suited to larger corporations that have greater risk profiles as a result of having more complex activities and engaging with a greater number of individuals and companies.

“pKYC has a cost and for the bigger companies, the cost is more acceptable because the value of it is higher,” he tells RegTech Insight. “The return on investment is higher because these cmpanies could potentially save so much in labour costs.”

Customer experience can also be improved by pKYC because compliance teams don’t need to reach out continually to clients to update and verify every small change in their circumstance. “They’re able to really work on the sidelines without reaching out to ask each customer where they’re working or how much they’re earning – the collection process becomes low-touch.”

New York-based Nikaj is also focused on the experience of small businesses in the risk-monitoring space. For them, he says, pKYC may just be too expensive. These businesses may not have the income or client list to justify the expense, and may be better able to manage their KYC obligations manually, he says. “The cost of these new technologies can sometimes be prohibitive and their applicability may be limited.”

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