Professional Documents
Culture Documents
What Is Know Your Customer
What Is Know Your Customer
KYC Stands for Know Your Customer. Know your customer (KYC) policy is
an important step developed globally to prevent identity theft, financial fraud,
money laundering and terrorist financing. The objective of KYC is to enable
banks to know and understand their customers better and help them manage
their risks prudently.
KYC is a regulatory and legal requirement and KYC policies are framed by
respective banks incorporating the key elements following the Reserve Bank of
Indias directive in 2004 such as Customer Acceptance Policy, Customer
Identification Procedures, Monitoring of Transactions and Risk management
The process of KYC entails identifying the customer and verifying the identity
by using reliable and independent documents or information.
While opening different accounts, the Bank collects documents to identify and
verify the customer as required under the existing laws to demonstrate that it
has performed the existing KYC procedures.
Know your customer (KYC) is the process of a business verifying the identity
of its clients. The term is also used to refer to the bank regulation which governs
these activities. Know your customer processes are also employed by
companies of all sizes for the purpose of ensuring their proposed agents,
consultants, or distributors are anti bribery compliant. Banks, insurers and
export creditors are increasingly demanding that customers provide detailed
anti-corruption due diligence information, to verify their probity and integrity.
Know your customer policies are becoming much more important globally to
prevent identity theft, financial fraud, money laundering and terrorist financing.
Objective:
The objective of KYC
guidelines is to prevent
banks from being used,
intentionally or
unintentionally, by
criminal elements for
money laundering
activities. Related
procedures also enable
banks to better
understand their customers and their financial dealings. This helps them manage
their risks prudently. Banks usually frame their KYC policies incorporating the
following four key elements:
Customer Policy;
Risk management.
When there are not enough documents with the bank in existing account
For Accounts of individuals, the bank will require the following information and
documents under KYC.
1.
2.
The individual/s will have to provide the original document for verification and
submit a copy for the Banks record.
Identity Proof(any one of the following)
i. Passport
ii. PAN card
iii. Voters Identity Card
iv.Driving license
v. Ration Card
vi. Identity card (subject to the banks satisfaction)
change. f Few institutions have automated, rules-driven KYC processes that are
localized by product, geography and risk.
The Solution:
Pegasystems KYC Framework streamlines KYC processes and enforces
organizational best practices to ensure compliance with global and regional
requirements. Intent-driven user interfaces guide staff through required
processing activities based on customer, product, geography and risk rating.
Built on Build for Change technology, Pegasystems KYC Framework is easily
modified and extended to support new business and regulatory requirement
changes.
Improving compliance with complex global regulatory requirements and
time to revenue while ensuring agility as risks and requirements change:
In a global compliance environment with increasingly complex product and
organizational structures, financial institutions and insurance companies
continue to struggle with identifying ways to manage the cost of compliance
while significantly improving their internal controls and minimizing their time
to transact with new and existing customers. The KYC compliance process
becomes an operational challenge; it often delays the time to onboard and
transact with new and existing customers, as back-office operations staff and
sales officers try to ensure compliance with increasingly complex regulations.
The complexity continues to increase as new products, geographies and risk
profiles are added.
Key Features:
Common KYC Platformf
Enables prioritization and routing of due diligence activities between
multiple users on one common platform with SLAs and escalation
processes to ensure timely and accurate evaluation
Allows for specialization by country, line of business and productspecific KYC and Enhanced Due Diligence (EDD) compliance
requirements
Enables reuse of existing due diligence and KYC documentation
globally, displaying existing vs. required due diligence, ensuring
consistency in due diligence while minimizing time to transact
SLAs
Configurable service-level agreements ensure that processes are managed
within regulatory and internal control time frames
Autogenerate and drive cases for re-evaluation of due diligence,
documentation and high-risk customer review
Key Benefits
Ensure 100% processing completeness, accuracy, timelines, and
compliance with global and regional regulatory requirements
Minimize onboarding time to improve customer satisfaction and reduce
account abandonment
Automate enforcement of consistent KYC practices
Specialize policies and procedures for regional and product-specific
requirements
Patented Build for Change technology enables rapid deployment,
modification and extension to manage changing risks and regulatory
requirements