Have you ever thought about how well you know your customer? Whilst it is not a legal requirement for unregulated businesses to undertake due diligence checks on their customers it could be argued that it is wise practice to undertake.
For those business that are regulated – not just financial institutions and banks, but also letting agents, estate agents, accountants and the gaming sector – are your systems and processes robust enough to protect you under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and associated legislation / regulations?
Know Your Customer (KYC) is the process by which businesses verify the identity and financial conditions of customers before doing business with them. Having a robust KYC policy and procedure allows you to establish the salient facts about the customer from the outset of the relationship and should be applied to new and existing customers alike.
Within the KYC process undertaking Anti Money Laundering (AML) checks can be an integral part of the compliance management system, which is advisable in all businesses but essential for every regulated business.
For those regulated businesses it is crucial to build a strong and robust fraud-prevention system, incorporating effective anti-money laundering measures into their business processes.
KYC and AML checks help to guard against money laundering, fraud and corruption, which can affect and impact on business and individuals alike, with significant consequences. KYC processes have also helped to prevent late payment and business failure. Know Your Customer is not just a risk mitigation measure but also a safeguarding process. Without the correct policies in place, businesses can risk facing serious loss of funds and reputational damage.
To ensure you know your customer, due diligence checks are an integral process to protect you and your business.