The UK's Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), National Crime Agency (NCA), and HM Revenue and Customs (HMRC) are among the regulatory authorities that monitor compliance with KYC and Anti-Money Laundering (AML) legislation.

To maintain compliance in the ever-changing geopolitical and economic context of today, businesses—especially those in the banking and financial sectors—must use a KYC checklist approach. Businesses may expedite client onboarding, ongoing monitoring, and real-time conformity to changing regulatory standards by using KYC checks.

In 2023, the worldwide financial system handled almost $3.1 trillion in illegal cash, with money laundering accounting for a sizable share of these transactions, according to NASDAQ's worldwide Scale of Financial Crime study. In addition, it was estimated that bank frauds and international fraud schemes cost $485.6 billion.

The need for strong KYC procedures is more important than ever, with 59% of organizations projecting a rise in financial crime in 2024.

In a setting where dangers are always changing, companies need to strengthen their defenses against illegal activity.

Inadequate KYC compliance carries dire consequences, including enormous fines associated with non-compliance. Businesses paid $6.6 billion in fines in 2023, highlighting the costly fallout from breaking regulations.

Effective KYC checks help organizations understand client preferences, establish trust, provide better service, and save expenses associated with customer acquisition and maintenance in addition to helping them comply with regulations.

A primer on the elements of a robust KYC process

The cornerstone of best practice KYC compliance, customized to the unique risks associated with various businesses and sectors, is a KYC checklist. The complete client lifetime, from first identification to continuing monitoring, is covered by these checklists.

The first step in a KYC check is client identification, which entails gathering and confirming personal information including name, address, and birthdate. This procedure also includes verifying ownership arrangements, business licenses, and company registration paperwork for entities.

Measures known as client Due Diligence (CDD) are implemented when forming new business partnerships or when questions emerge about the quality of client data. For high-risk clients, enhanced due diligence (EDD) is used, which combines sophisticated investigation methods to reduce possible dangers.

In order to guarantee continuous compliance with regulatory standards, continual monitoring—also referred to as continuous due diligence—involves the methodical assessment of customer profiles, business operations, and risk occurrences.

How FullCircl is beneficial

FullCircl provides a full range of solutions, including automated data collecting, identity verification, watchlist screening, and continuous monitoring capabilities, for companies looking for help with KYC compliance.

With its scalable verification procedures and smooth integration, FullCircl gives companies the tools they need to effectively manage the challenges of KYC compliance.