The KYC Process step 3 is the organization of information and evidences in the meaningful form for the review of authorizer or senior management of the organization.
As part of KYC process, after exploring the customer’s identification information, to identify the true identity of the customer, and the beneficial owner from different possible, and reliable sources and after performing the ML/TF risk assessment, the account opening officer or team organizes all the customer information and data in a logical and meaningful form.
KYC Process Step 3: Organize
This organization of information is intended for the later review by the authorizer or senior management. Without appropriate organization of customer initial information and evidences, the KYC objectives may not be met, which include the protection of an organization from being used for money laundering / terrorist financing activities, and to avoid the risk of onboarding the criminals such as money launderers or persons associated with criminals in any manner.
KYC/CDD performed at different stages of the customer lifecycle, should be organized appropriately, as part of the record of the respective customer.
The information should be organized in such a manner that review may readily identify the case and review the critical information and evidences, easily. In cases of high-risk customers, the information and evidences are usually detailed, therefore, the authorizer or senior management require relevant and critical information on the front, for ready review.
For example, if the customer belongs to the high-risk jurisdiction, then the detail about the connections of the customers in that country, business activities, media searches, beneficial owner details, etc. would be required for review purposes.
Only the customer’s organized information and evidences can enable the reviewer to perform appropriate review and take the relevant decision based on the information organized. The account opening officer ensures that for each customer proper files are maintained containing the right and current information about the customer. The information obtained at different stages should also be organized in a proper and sequential manner, for later review and reference purposes.
Final Thoughts
Organize the information and feedback obtained from different reliable sources, to corroborate the evidence with the customer’s information. KYC is critical to the establishment of a trustworthy financial system. Criminal entities are well aware of the gaps in their systems and use them to their advantage. Dynamic security measures are desperately needed to ensure productive risk prevention.
