Compliance advisory firms are organizations that specialize in providing guidance and assistance to businesses on regulatory compliance and Know Your Customer (KYC) and Anti-Money Laundering (AML) issues.
These firms are usually made up of a team of compliance experts who possess knowledge and experience in various industries, laws, and regulations. They work closely with their clients to identify potential risks, develop strategies to mitigate those risks, and ensure compliance with relevant laws and regulations.
Compliance advisory firms play a critical role in helping businesses stay compliant with constantly evolving laws and regulations. They provide a wide range of services, including compliance audits, risk assessments, policy development, training programs, and ongoing support and guidance. They also help businesses carry out the necessary KYC and AML checks on behalf of their own customers.
They are also especially important for industries that are heavily regulated, such as banking and finance, healthcare, energy, and telecommunications. These industries face complex regulatory frameworks that can be challenging for businesses to navigate on their own. Compliance advisory firms bridge the gap between businesses and regulators, helping companies understand and adhere to their legal obligations.
Compliance advisory firms also help businesses save time and resources by monitoring regulatory changes and providing guidance on how to adjust policies and procedures accordingly. They can also conduct internal reviews and assessments to identify potential areas of non-compliance
However, due to the complexity and large volumes of KYC checks required by clients operating in diverse jurisdictions and the digital economy, the challenge of consistently carrying out effective KYC/AML can be daunting for companies attempting to carry out everything in-house.
KYC Challenges for Compliance Advisory Firms
In recent years, compliance advisory firms have faced numerous challenges in their efforts to keep up with the ever-evolving regulatory landscape. One of the most significant challenges has been the increasing pressure to comply with KYC requirements.
KYC regulations are put in place to prevent money laundering and terrorist financing, and they require companies to verify their customers’ identities, assess their risk ratings, and continuously monitor their activities.
As establishing someone’s true identity is the first and most important step a company can take in preventing their services from being used for illicit purposes — or the target of fraud — KYC is a cornerstone of global and local regulators’ never-ending fight against money laundering and other financial crimes.
At the same time, as most commercial activity has moved online, firms that have lagged in their adoption of KYC technology have found themselves restricted in how many clients they can serve — and how to grow their business.
The Need for Automated KYC Technology
Manual KYC processes are often time-consuming, expensive, and prone to human error. As a result, many compliance advisory firms have turned to automated KYC technology as a solution.
These technologies use advanced algorithms and artificial intelligence (AI) to analyze vast amounts of data and quickly provide accurate and reliable customer due diligence reports.
Benefits of Automated KYC Technology
Multi-Scoping: Optimizing KYC for Compliance Advisories
KYC-Chain provides our automated KYC technology to a leading global compliance advisory firm. One of the main benefits for the firm is the ability to use our Multi-Scoping feature to manage multiple client scopes within a single platform that is only accessible to their own compliance team.
Much like a head office of a multinational can use our Multi-Scope tool to have a complete overview of their group’s KYC/AML compliance and onboarding processes, our client is able to ensure that their clients’ KYC processes are being managed from one space, with each client only being able to access their unique scope.
For example, if a compliance advisory firm has 10 clients that they run KYC / AML checks for, using Multi-Scope, they can create individual scopes for each client within one single platform.
This provides complete transparency for each client within their own scope, while ensuring each client’s KYC processes and data is strictly accessible to only the compliance advisory firm and the individual client.
Other benefits compliance advisory firms implementing Automated KYC can enjoy include:
Time and Cost Savings: With automated KYC technology, compliance advisory firms can significantly reduce the time and resources spent on manual KYC processes. This frees up valuable staff time to focus on more complex tasks, such as risk assessment and mitigation.
Improved Accuracy: Automated KYC technology eliminates the risk of human error, ensuring that compliance teams have access to accurate and up-to-date customer due diligence information.
Enhanced Compliance: By leveraging advanced AI algorithms, automated KYC technology can help compliance advisory firms stay on top of ever-changing regulatory requirements, reducing the risk of non-compliance.
Scalability: As companies grow and expand their customer base, manual KYC processes become increasingly challenging to manage. Automated KYC technology provides a scalable solution that can handle large volumes of data without compromising accuracy or efficiency.
KYC-Chain’s rich feature set for compliance advisory
KYC-Chain’s automated KYC technology has numerous applications for compliance advisory firms. Some common use cases include:
Onboarding New Customers: By using our customizable end-to-end workflow with multi-scoping, compliance advisory firms can streamline the onboarding processes of their clients into an integrated platform. Each individual client’s KYC process can be fully customized to meet their specific needs, geographic scope and compliance requirements.
Risk Scoring: KYC-Chain’s onboarding system uses advanced risk scoring to inform a Risk-Based Approach to compliance. Prospective customers are scored according to the risks they pose from an AML standpoint, and then processed through KYC/KYB checks that are pre-configured for each risk score. This optimizes the onboarding process and enhances the Customer Experience.
KYC / KYB document verification and validation: KYC-Chain’s automated KYC technology uses advanced screening processes such as Passive Liveness to ensure submitted ID documents match the person completing the KYC process. Our technology also scans submitted ID and business registration documents for authenticity and checks them against verified government databases and corporate registries to ensure the validity of submitted information – a crucial step for both KYC and Know Your Business (KYB) checks.
Ongoing Monitoring: KYC-Chain’s platform can continuously monitor customer activity for any changes that can indicate a change in their risk rating — and may require further due diligence or risk assessment.
Transaction Monitoring: Our automated KYC technology can also flag suspicious transactions, helping compliance teams identify potential money laundering or terrorist financing activities.
Screening for Sanctions and PEPs: Compliance advisory firms can use automated KYC technology to screen potential customers against sanction lists and politically exposed persons (PEPs) databases.
Wallet screening: Our onboarding platform also includes tools for carrying out screening of crypto wallets in order to detect whether the wallets have been featured on any watch lists or display indications that they have been used in financial crime.
In today’s fast-paced regulatory environment, compliance advisory firms must stay up-to-date with the latest KYC requirements.
As technology continues to advance, automated KYC solutions will play an increasingly vital role in helping companies meet regulatory obligations while maintaining efficiency and effectiveness. So, it is crucial for compliance advisory firms to embrace these technologies to stay ahead of the curve and ensure long-term success.
By leveraging automated KYC technology such as KYC-Chain, these firms can save time and resources, improve accuracy and compliance, and scale their operations to handle growing customer bases.
Are you looking for a KYC software solution for your compliance advisory firm? Get in touch and we can arrange a demo of how KYC-Chain can make it happen.