#FOUR ELEMENTS TRAINER 6.0.1 FULL#
#FOUR ELEMENTS TRAINER 6.0.1 VERIFICATION#

Transaction monitoring is an ongoing process and commonly involves a three-pronged approach: By closely inspecting customer transactions, organizations can identify unusual activity that may indicate a financial crime and require further investigation. Ongoing transaction monitoring refers to the process for scrutinizing customer financial behavior to determine suspicious and fraudulent activity. This is to establish the source of their funds and the potential risks of bribery, corruption, money laundering, terrorist financing, and other criminal activities. The level of due diligence often varies, and high-risk customers such as politically exposed persons are likely to be held to extra scrutiny. It allows organizations to analyze key information about a customer such as their occupation, source of funds, reason for holding an account, and their spending history. It involves assessing the risk associated with each customer based on their profile and transaction activity.Ĭustomer due diligence is a legal requirement that helps us understand the risks involved with financial crime.

The process which banks, financial institutions, and businesses use to verify the identity of their customers and check their financial background is known as customer due diligence.

#FOUR ELEMENTS TRAINER 6.0.1 VERIFICATION#

Verification tools such as fingerprint scanning, and facial recognition are also used to verify a customer’s identity. This is usually sourced from official government-issued documents such as passports and driver’s licenses that enable an organization to verify that the customer is who they claim to be. It is usually the first step in the process and is a legal requirement for all banks, businesses, and financial institutions.Ĭustomer identification and verification typically involves obtaining information about the customer including their name, address, date of birth, and other personal data. The most important step in the KYC process is customer identification and verification.

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KYC is a fundamental practice designed to reduce this risk of financial crime and protect your organization from fraud, money laundering, and terrorist financing as well as losses that may arise from handling illegal funds.īelow are 6 essential KYC best practices to follow to ensure full compliance is met and organizations know precisely who their customers are. How well do you know your customers? Any bank, business, or financial institution could face significant fines, sanctions, and reputational damage if money intended for financial crimes passes through its system. What are the 6 key elements of KYC best practices? Therefore, it has never been more important to implement effective measures and follow best practices for KYC compliance to combat financial crime. However, despite the best efforts of these organizations, there has been a steady increase in money laundering cases since 2016, and it is now estimated to be worth between 2% and 5% of global GDP. It is such a vital tool for combating financial crime that failure to follow strict KYC regulations and compliance can result in severe penalties and fines of up to $250,000 or even imprisonment. KYC forces you to verify and authenticate the identity of your customers. It is designed to prevent financial crimes such as fraud, money laundering, and terrorist financing from taking place. Know Your Customer (KYC) refers to the processes that financial institutions, banks, and businesses use to verify that all money they handle comes from legal and verified sources.

Four elements trainer 6.0.1