Throughout this month, we will delve into different concepts and assumptions of this process, as well as for Individuals or Legal Entities (or “Legal” in the rest of Latin America) who wish to enter the financial system as investors or clients.
The KYC (Know Your Customer) process comprises a set of steps aimed at verifying and authenticating the identity of customers. Its fundamental purpose, as its name says, is to know the customer. But what does it mean to know your customer? : in itself, it is to know who he is; both the natural person and the legal entity, what he does, where the funds he seeks to enter the financial system come from, if his professional activity, if he is sanctioned, fined or wanted by an international organization, if he has judicial proceedings initiated, ongoing or completed, if he is a Politically Exposed Person (PEP), either directly or indirectly, among many other assumptions that we will be developing.
So what is the purpose of the KYC process? : the ultimate goal is to comply with international obligations to prevent money laundering, and to prevent practices such as money laundering, terrorist financing, drug trafficking, human trafficking, money derived from online fraud and other related crimes within the financial sphere.
The central purpose of KYC processes is to identify and verify the identity of customers. This is achieved by collecting and monitoring reliable data and documentation, not only to confirm that they are the people they claim to be, but also to prevent impersonation and online fraud, together with the prevention of the practices mentioned above.
In addition, in accordance with the regulations for the prevention of money laundering and terrorist financing applicable to Obligated Subjects, before establishing a business relationship, financial entities and institutions must verify the identity of the potential customer by consulting various lists and public information bases. This is not limited to the National Identity Document (DNI in Argentina), the Unique Key to the Population Registry (CURP in Mexico) or the Citizenship Card or Identity Document (CC/DI in Colombia), but continuous screenings and checks must also be generated within the National, Provincial and Municipal public lists of each country. For example, in Argentina, consultation with the RePet list, which is a publicly accessible record within the scope of the National Directorate of the National Registry of Recidivism of the Undersecretariat for Registry Affairs of the Ministry of Justice and Human Rights.
We also leave them our blogs about listings most common to verify.
To generate an orderly flow of account opening and customer acceptance, in general, banks base their KYC process on two key elements:
Know Your Customer (KYC) represents the first and main anti-fraud measure for banks, financial institutions and companies in the sector, since it gives them the precise ability to know the important data of their customers. Once the prospect is accepted as a customer, it is much more difficult to track their funds specifically, so it is essential to do so in a prima facie.
While some companies continue to implement these procedures in person, in order to mitigate future risks but in return to limiting the business, a significant number of organizations are progressively adopting a completely remote approach, marking the first step towards a definitive improvement in the process.
Technological innovations offer companies a range of opportunities to improve the user experience, while maintaining regulatory compliance and the precision that the authentication of new customers deserves. These technologies also enable process automation, reducing costs and strengthening loyalty.
In this sense, digital validation is this new ability of companies to register customers through two key procedures: digital identification and digital authentication.
When undertaking a KYC process, it is imperative to have tools that meet all expected requirements in an agile manner and with the highest security standards. Fortunately, there are numerous services that make it possible to reliably verify the identity of customers and, at the same time, to corroborate their profiles by crossing data with public information databases. So that every precaution is taken to prevent commercial links with agents of crimes such as money laundering and terrorist financing.
In conclusion, the effective implementation of KYC technologies not only reinforces security and regulatory compliance, but also establishes the foundations for a strong and lasting business relationship with customers.
Desde Complif estamos para ayudar a los equipos de compliance y prevención de lavado de dinero a hacer su día a día más eficiente y disminuir las fricciones de tiempo y monitoreo. ¡Escribinos!.
For banks and financial institutions, onboarding new customers is a critical yet complex process. Compliance teams must balance regulatory requirements with customer experience while ensuring fraud prevention and risk management. Lengthy manual verifications and compliance hurdles often slow down account opening, leading to customer drop-offs and inefficiencies. Complif provides a seamless, automated solution that accelerates account origination while maintaining full regulatory compliance.
Banks and financial institutions must conduct periodic KYC (Know Your Customer) and compliance reviews to ensure ongoing due diligence and regulatory adherence. However, these reviews can be time-consuming, manual-intensive, and prone to inefficiencies. Complif transforms this process by automating periodic reviews, reducing compliance workload, and ensuring real-time risk assessment.
Banks and financial institutions are under constant regulatory pressure to detect suspicious activity, comply with Anti-Money Laundering (AML) laws, and reduce financial crime risks. Traditional transaction monitoring systems can be slow, inefficient, and prone to false positives, leading to compliance fatigue and operational inefficiencies. Complif provides a next-generation AML monitoring solution that enhances compliance productivity, reduces false alerts, and enables proactive risk detection.
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