KYC, AML (anti-money laundering) and compliance investigations

KYC, AML (anti-money laundering) and compliance investigations

In today's business world, regulatory compliance is crucial for the success and sustainability of any company. Our professional KYC services are designed to ensure that your company can safely and efficiently identify and verify the identity of your customers, protecting your business from fraud and illicit activities. Thanks to our extensive industry experience and the use of cutting-edge technologies, our agency offers advanced KYC solutions, allowing you to focus on your core business with the peace of mind that you are always compliant with current regulations.

What is KYC?

KYC stands for “Know Your Customer,” which means “know your customer.” It is a specific procedure that certain categories of professionals must follow.

What is the purpose of KYC? These categories of professionals must implement KYC procedures to verify the identity of their clients and users, to avoid involvement in illegal activities, specifically money laundering, online fraud, corruption, and terrorism.

Not surprisingly, professionals involved in KYC include:

• Credit institutions
• Banking and financial intermediaries
• Accountants and labor consultants
• Notaries and lawyers
• Legal auditors and audit firms
• Real estate agents
• Civil mediators
• Gaming service providers
• Virtual currency service providers

When should KYC verification be performed?

When is the obligation for adequate verification triggered? The KYC procedure is mandatory as per Legislative Decree No. 90 of May 25, 2017, which implements the European Regulation “on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.”

This action represents a key move in AML (Anti Money Laundering), where investigative agencies play a fundamental role through Compliance Investigation services, which allow the collection of appropriate information to obtain the compliance judgment required by law.

When is the KYC procedure applied? KYC verification must be carried out at various key moments to ensure the compliance and security of business operations. The main moments are as follows:

1. When opening a new account or business relationship: KYC verification is necessary when a customer starts a new relationship with a company, such as opening a bank account, taking out an insurance policy, or starting a service contract.

2. Significant transactions: For high-value or unusual transactions, companies must conduct KYC verification to ensure the legitimacy of the funds' origin and that the customer is not involved in illegal activities.

3. Changes to customer data: When a customer updates key information such as address, phone number, or other relevant personal information, it is advisable to re-run the KYC process to verify the authenticity of the new information.

4. Periodic monitoring: KYC regulations require that customer information is periodically updated and verified. This can vary depending on local regulations and the risk level associated with the customer.

5. Reporting suspicious activities: If a company detects suspicious or unusual activities that may indicate illegal behavior, it is required to conduct thorough KYC verification to investigate further.

Conducting KYC verification at these key moments helps companies prevent fraudulent activities, stay compliant with regulations, and protect their reputation.

What does a KYC Analyst do?

A KYC Analyst is a professional who plays a crucial role within financial institutions and other organizations subject to anti-money laundering (AML) regulations. The KYC analyst is responsible for verifying customer identities, assessing the risk associated with each customer, and ensuring that the organization complies with local and international regulations.

Main tasks of a KYC Analyst

1. Information collection and verification: The KYC analyst collects detailed information about customers, including identity documents, proof of address, and other personal information. These data are then verified to ensure authenticity and accuracy.

2. Risk assessment: Using the information collected, the analyst assesses the risk of money laundering or terrorist financing associated with each customer. This includes analyzing various factors such as the origin of funds, the nature of the business activity, and the customer's country of residence.

3. Ongoing monitoring: The KYC analyst continuously monitors customer transactions and activities to identify suspicious or unusual behaviors that might indicate illegal activities. This includes the periodic updating of customer information and reviewing ongoing transactions.

4. Regulatory compliance: The analyst ensures that the institution complies with all pertinent laws and regulations, both locally and internationally. This may include preparing compliance reports and cooperating with regulatory authorities during audits and investigations.

5. Training and advisory: The KYC analyst may also provide training and advice to other members of the organization, helping them understand KYC policies and procedures and identify potential compliance risks.

6. Documentation and reporting: Maintaining accurate and detailed documentation of all verifications performed and preparing regular reports on monitoring and risk assessment activities.

Not all organizations have this figure internally. In these cases, KYC procedures can be entrusted to specialized and authorized investigation companies, such as investigative agencies.

KYC Procedure and AML Compliance

The KYC procedure is a fundamental element in the AML compliance strategy. This process involves a series of steps and checks aimed at identifying and authenticating customers to prevent illicit activities such as money laundering and terrorist financing. Through the collection, analysis, and monitoring of customer information, financial institutions can ensure compliance with AML regulations, protecting both the integrity of the organization and the global financial system.

What is an anti-money laundering questionnaire?

The anti-money laundering questionnaire is a tool used by financial institutions, banks, and other entities subject to anti-money laundering (AML) regulations to collect detailed information about their customers and their activities to identify and assess the risk of money laundering and terrorist financing. This questionnaire requires personal information, such as full name, residential address, date and place of birth, and identification number. It also includes professional details related to employment, employer, and industry, along with financial information covering sources of income, details on assets and liabilities, and credit history.

Additionally, the questionnaire explores the nature and purpose of the account or business relationship, describing the main expected operations and the origin of funds. If applicable, details are required about the beneficial owner, that is, the individuals who ultimately own or control the customer, along with the entity's ownership structure. The customer must also confirm that the information provided is accurate and compliant with AML laws and regulations.

The purpose of the questionnaire is to assess the risk associated with each customer, ensure compliance with AML regulations, and provide a basis for ongoing transaction and activity monitoring. The process involves initial completion by the customer, verification, and validation of the information by the financial institution, and periodic updates to reflect any changes in the customer's circumstances or regulations. This questionnaire is thus a crucial element for risk management and regulatory compliance in financial institutions, helping to prevent money laundering and other illicit financial activities.

Benefits of KYC

KYC services offer numerous benefits beyond simple customer identity verification. One of the main advantages is fraud and illicit activity prevention: by implementing rigorous verification procedures, companies can identify and block suspicious transactions and anomalous behaviors.

Moreover, KYC ensures legal compliance, helping the company adhere to all current anti-money laundering (AML) and terrorist financing regulations. This not only protects the company from potential legal penalties but also helps safeguard its reputation through thorough and constant checks.

Finally, KYC services improve operational efficiency by automating the collection and analysis of customer data, reducing the risk of manual errors and enabling a smoother and more secure information management process.

To avoid penalties and obtain the right information, a sector professional can ensure the procedure's successful completion in the shortest possible time.

Phersei's KYC Procedure

The KYC process offered is structured into several key phases to ensure thorough and continuous customer verification while ensuring compliance with current regulations. Here is a detailed description of the process phases.

1. Data Collection

   • Personal Information: full name, date and place of birth, nationality.
   • Identification Documents: copies of identity documents such as passport, ID card, driver's license.
   • Proof of Residence: recent utility bills, bank statements, rental contracts.
   • Financial Information: sources of income, asset status, bank details.

2. Document Verification

   • Authenticity: verification of the authenticity of identity documents through automated or manual verification systems.
   • Validity: checking the validity of the documents, ensuring they are not expired or falsified.
   • Consistency: ensuring consistency between the provided information and the presented documents.

3. Risk Analysis

   • Profile Evaluation: analysis of the customer's profile based on collected information, including professional background and financial history.
   • Source of Funds: verification of the source of funds to ensure they come from legitimate sources.
   • Risk Category: assigning a risk category to the customer (low, medium, high) based on factors such as geographical location, business sector, and the nature of the expected transactions.

4. Continuous Monitoring

   • Data Updates: periodic collection of new information and updating customer data to reflect any changes.
   • Transaction Surveillance: monitoring ongoing transactions to identify suspicious or anomalous activities.
   • Reporting Suspicious Activities: preparation and submission of Suspicious Activity Reports (SAR) to the competent authorities, if necessary.

This integrated and systematic process ensures that every customer is accurately verified and monitored, minimizing the risks of fraud and illicit activities, and keeping the company in line with anti-money laundering and counter-terrorism financing regulations.

Discover how we can protect your company from fraud and ensure compliance with regulations with our professional KYC services. Contact us today for a free and personalized consultation!