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Perpetual KYC: requirements and realities

Perpetual KYC has recently become a “hot” subject in compliance management. Although all the leading AML solutions providers offer educational information and insights, there is no, to the best of our knowledge, viable solution for Perpetual KYC as of now; the one that fully meets the idea and requirements of the task.

Perpetual KYC, also known as pKYC or Continuous KYC, is a proactive ongoing process that replaces periodic reviews. It continuously screens relevant sanctions and watchlists, promptly triggering alerts in response to changes in the lists, if any. This enables swift incorporation of changes and updates into the KYC process, ensuring efficient and effective ongoing monitoring.

Understanding the Concept of Perpetual KYC

Perpetual KYC is fast becoming a sought-after aspect of compliance management, despite the lack of comprehensive solutions currently available in the market. It encapsulates a proactive process that continuously screens relevant sanctions and watchlists, thereby promptly triggering alerts for any changes or updates. This strategy ensures swift integration of changes into the KYC process, delivering effective ongoing monitoring.

Challenges in Implementing Perpetual KYC

Financial (and non-Financial) institutions lack efficient tools to carry out the ongoing pKYC screening. According to PwC, “there is currently no single vendor that provides all the required capabilities.” Besides, the technologies currently in use:

  • produce over 30% of false alerts that need to be processed manually or semi-manually by compliance teems,
  • incapable of uploading batch files,
  • require a considerable amount of time for the ongoing screening of the customer base. The process disrupts operations and workflow,
  • result in poor screening quality and missed hits.
These are just some of the existing issues. 
 

Being unable to rely on existing technological solutions or to enlarge its workforce (due to already high operational costs), the organizations are forced to screen their customer base periodically, usually once a month/quarter/year, which inevitably results in omissions and potential fines.

Transforming AML Compliance with Fincom's pKYC Solution

Regulators mandate that each financial institution must screen their client database for changes and updates regularly. Fincom’s Perpetual KYC solution provides a fully automated compliance process, screening the client database against the latest sanction or PEP lists without disrupting workflow.

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