Knowledge Base
Business insights and articles written by our team of world-class professionals
New EU measures against money laundering and terrorist financing issued in April 2023
The European Union has issued new measures to combat money laundering and terrorist financing in April 2023. The new rules come in response to growing concerns about the negative impact of money laundering and terrorist financing on the economy and society as a whole. The measures are part of the EU’s wider strategy to strengthen the fight against financial crime and follow recent anti-money laundering efforts, such as the EU’s Fifth Anti-Money Laundering Directive (5AMLD), which was implemented in 2020. The new measures are designed to build on the existing framework and address the evolving nature of financial crime. One of the key elements of the new measures is the creation of a centralised EU-wide database with information on beneficial
What are KYC and pKYC?
KYC and Perpetual KYC are two important terms used in the financial sector, particularly in banking, investment and insurance. These terms refer to the process of verifying a customer’s identity and ensuring that they are not involved in illegal or fraudulent activities. KYC stands for “Know Your Customer” and refers to the process of verifying the identity of a customer or client. This process is required by regulators in most countries and is designed to help financial institutions identify and prevent fraudulent activity, money laundering and terrorist financing. The KYC process involves collecting detailed information about a customer’s identity, including name, address, date of birth and other personal details. The information is verified through various means, such as documents like
Mitigating the impact of corruption and bribery: Practical steps to take
According to the World Economic Forum, corruption costs developing countries $1.26 trillion every year, a staggering figure that highlights the devastating impact of this illegal activity. Unfortunately, the problem is not limited to developing countries, as according to the above statistics, half of the EMEA (Europe, Middle East and Africa) population finds corruption acceptable. This is a worrying trend that should be addressed by financial crime professionals and anyone else who wants to promote ethical and sustainable business practices. Corruption and bribery are not just abstract concepts – they are real-life issues that affect individuals, organisations and entire societies. Unfortunately, these illegal activities can be difficult to detect and prevent and can have far-reaching consequences. Here are some real-life examples
Key aspects of monitoring bank transactions
In an evolving financial landscape, new criminal methodologies and regulatory obligations regularly change firms’ compliance obligations. In order to detect and prevent money laundering in this regulatory environment, banks must strive to understand the financial activity of their customers by implementing an appropriate transaction monitoring solution as part of the broader anti-money laundering and counter-terrorist financing framework. What is transaction monitoring in banks? Transaction monitoring is the means by which a bank monitors the financial activity of its customers to detect signs of money laundering, terrorist financing and other financial crimes. The transaction monitoring process should allow banks to understand who their customers are doing business with and reveal important details about the transactions themselves: how much money is involved,
Neobanks, artificial intelligence and KYC
Artificial intelligence is changing the neobanking landscape, and machine learning is poised to improve your identity verification process, boost your conversion rate and accelerate your ROI. In traditional banking, a financial institution would try to prevent financial crimes and illegal activities, such as terrorist financing, by implementing KYC-compliant practices. These KYC compliance measures would include physically checking a potential customer before they have access to day-to-day services, from opening bank accounts or a current account to purchasing new debit or credit cards. In financial services, it is still necessary to verify the identity of potential customers, but with the growth of digital banking globally, operators are looking for more innovative solutions to complete enhanced due diligence (EDD), customer due diligence
How do KYC and AML procedures in the crypto world help prevent fraud?
Early November was not an easy time in the Hong Kong office of a global cryptocurrency exchange, FTX. After battling comments from their competitors on social media on November 6, the company halted withdrawals on November 8. Over the next two days, after hearing a vague comment from their colleagues in the Bahamas, employees in Asia were told not to come to the office. This fiasco of FTX management and their implementation of anti-money laundering (AML) procedures has become a hot topic in the community ever since. After months of active encouragement from various global regulators to establish and follow AML and Know Your Customer (KYC) policies, Virtual Asset Service Providers (VASPs) watched FTX continue its operations while it had
Key KYC and financial crime developments in 2023
Increased geopolitical risks increase money laundering opportunities Geopolitical risk has increased significantly in 2022 and shows no signs of diminishing in 2023. The ongoing war between Russia and Ukraine is a key case in point and has resulted in Russia becoming the most sanctioned country in the world. There are also ongoing tensions with Iran, which has the second highest number of sanctions. The increase in the number of sanctions worldwide leads to a greater possibility of money laundering. In 2023, we can expect to see the emergence of more complex money laundering schemes; trade-based money laundering (TBML), where money is moved through commercial transactions, is a particular problem. The US sanctions issued in November 2022 against several companies accused
