How to build and manage sustainable KYC
UK financial institutions find themselves at the forefront of the drive against money-laundering, a crime that is estimated to cost the UK economy £365bn each year, according to Transparency International UK.
This joint paper with PwC lays out a transformative approach to KYC – one that frees institutions from endless remediation cycles and manual checks, and instead uses external data, analytics and automation to turn the process on its head.
Money-laundering is estimated to cost the UK economy more than £365bn each year
Yet the volume of new businesses is also growing at an exponential rate.
Financial institutions find themselves locked into periodic remediation cycles, often struggling to deal with the ever-growing backlog of KYC reviews. Using third-party data sources and advanced analytics, PwC and Experian can help financial institutions break free from remediation to establish effective and sustainable KYC.
Download the whitepaper nowOff-shore directors
100% rise over ten years in the number of UK companies with no UK-based directors (2011-2021)
Risky connections
116% rise over the three years to 2022 in the number of UK companies exposed to jurisdictions defined by the EU as 'high risk' for money laundering
Zombie directors
There are 6500 UK companies currently registered that were incorporated with directors who were dead at the time of formation
Cash-handling businesses
There are more than three times as many cash-intensive businesses in the UK as there were 12 years ago. These businesses are often considered vulnerable to money laundering
In this paper we cover:
The money laundering threat
Why it is critical institutions get KYC right
Challenges
The challenges institutions face today in implementing effective and sustainable KYC
Data and advanced analytics
How external data and advanced analytics is opening up a new approach to KYC
Transforming capabilities
How institutions can transform their capabilities through three key steps
A sneak peek into:
The money laundering problem - and why it's on the agenda
The money laundering threat
Experian data shows that there are two-and-a-half times as many companies in the UK as there were 12 years ago. More and more registered businesses have characteristics that may indicate a risk of money laundering.
Financial institutions providing services to commercial business customers are therefore facing a combination of increasing numbers of businesses they need to interact with, increased complexity of financial crime risks and typologies and greater scrutiny from regulators.
The costs of not getting it right
Detecting and preventing money laundering is a huge expense which financially regulated institutions are constantly tackling. Institutions that fall short of the Financial Conduct Authority standards in Anti Money Laundering also face hefty fines and reputational damage if they fail to act effectively.
- In May 2021, the FCA contacted every CEO of UK retail banks to warn them of “common control failings identified in anti-money laundering frameworks“. The regulator demanded action and made it clear that the clock was ticking.
- In December 2021, a Tier 1 UK bank was fined almost £265m following convictions for three offences of failing to comply with money laundering regulations.
- In April 2022, the FCA spotlight fell on AML at challenger banks, stating that where “challenger banks promote the ability to open accounts very quickly to attract customers, there is a risk that information gathered at the account opening stage is insufficient to identify higher risk customers.”
Did you enjoy the read?
Read our joint paper with PwC to find out how your organisation can pivot towards automated KYC
This paper lays out a transformative approach to KYC – one that frees institutions from continuous remediation cycles and manual processes through use of external data, analytics and automation.
Further reading
Anti-Money Laundering – should you consider electronic identity checking?
Anti-Money Laundering (AML) regulations affect many industry sectors in a number of ways. One requirement is that the identity of customers is verified in order to prevent the proceeds of crime being legitimised.
Detect, prevent and deter UK B2B Fraud and Money Laundering
In our webinar series, discover the key trends around how criminals are exploiting UK business to perpetrate fraud and financial crime.
Know your customer (KYC) assessment and remediation – verify existing customer and business owner identities to meet regulatory requirements
Are you verifying existing customer and business owner identities to meet KYC and AML requirements? Ongoing customer assessments and remediation are essential to meeting regulation and protecting your business and customers. Read our blog to find out more.
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The MO of an ML: A real-world example of a money laundering business
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The true scale of UK Money Laundering
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