KYC Screening Process

During this task, collect all necessary personal information from the customer. This includes their full name, date of birth, address, contact details, and any other relevant information. Ensure that the provided information is accurate and complete to proceed with the KYC screening process.

In this task, verify the customer's identity to ensure they are who they claim to be. Request valid identification documents such as a passport, driver's license, or national ID card. Cross-check the provided information with the customer's personal information and conduct any necessary verification checks to validate their identity.

Verify the customer's creditworthiness and financial standing by conducting credit checks. This will involve gathering the customer's financial information, such as their income, debt, and credit history, and assessing their creditworthiness based on this information. Use credit reporting agencies or internal credit assessment tools to carry out the credit checks effectively.

Ensure that the customer is not listed on any international sanctions lists by conducting a thorough screening. This involves checking the customer's name against various global sanction lists, such as those maintained by the United Nations and other regulatory bodies.

Determine if the customer is a politically exposed person (PEP) by checking their name against PEP lists. Politically exposed persons are individuals who hold prominent public roles or positions and may pose higher risks for potential money laundering or corruption. Conduct necessary checks to identify any PEP connections.

Investigate and document the source of the customer's wealth and funds. This includes understanding their occupation, business ventures, investments, inheritance, or any other sources of income. Ensure that the accumulated wealth and funds align with the customer's declared income and financial history.

Analyze the customer's transaction behavior by reviewing their financial activities, such as cash flow statements, bank statements, investment activities, and any relevant transaction records. Look for any unusual or suspicious patterns, such as frequent large transactions, multiple deposits or withdrawals, or transactions involving high-risk jurisdictions.

Evaluate the customer's risk level for potential money laundering and terrorist financing activities. Assess the customer's risk based on various factors, including their financial background, transaction behavior, source of funds, jurisdictional risks, and any other relevant indicators. Determine a risk rating for the customer based on this evaluation.

Regularly update the customer's KYC information to ensure accuracy and completeness. Set up a system or process to track any changes in the customer's personal information, ongoing monitoring activities, and updated source of wealth and funds information. This will help in maintaining up-to-date KYC records.

Retain the customer's KYC records for a specified period as mandated by regulatory and legal requirements. Ensure that the records are securely stored and accessible for auditing or regulatory purposes when needed. Develop a record retention policy to outline the required duration for retaining KYC records.

Establish a robust system for ongoing monitoring of the customer's activities and behavior. Regularly review and assess the customer's transactions, source of funds, and any changes in their risk profile. Implement alerts or triggers for detecting suspicious or high-risk transactions and set up a process for periodic reviews or updates of the customer's risk rating.

In case of encountering any suspicious activities or transactions, report them promptly to the relevant authorities or regulatory bodies. Develop clear reporting procedures and ensure that all personnel involved in the KYC screening process are aware of the reporting obligations and process. Document any suspicious activity reports (SARs) filed for future reference.

For customers deemed high-risk based on the KYC evaluation, obtain management approval before further engagement. Develop a clear process for escalating high-risk customers to the management or higher-level authority for review and approval. This helps ensure that adequate due diligence is conducted and appropriate risk mitigation measures are implemented.

In certain cases where significant risks or non-compliance with regulations are identified, consider terminating the customer's account. Establish clear guidelines and threshold criteria for deciding when account termination is necessary. Communicate the decision to the customer, follow the required procedures for closing the account, and document the reasons for account termination.