In this monthly update, we cover some of the latest exciting developments in RegTech — and how they can improve KYC compliance, particularly for wealth management firms.RegTech solutions offer a range of benefits, including automated data collection capabilities, streamlined customer onboarding processes and fraud detection systems — allowing businesses to reach compliance with relevant local and international regulations. With advanced analytics and machine learning algorithms, organizations can quickly identify suspicious activity and potential money laundering attempts and take appropriate action.

Here are the top 5 ways RegTech can optimize KYC/AML compliance for regulated businesses:

  1. ID Document Verification (IDV)
  2. CDD / AML Screening
  3. Case management and workflow solution
  4. Risk Scoring and Ongoing Monitoring
  5. Transaction Monitoring and Crypto AML

For wealth management firms, robust KYC/KYB processes are essential for ensuring compliance with government regulations while maintaining secure relationships with clients through verification and trustworthiness. Historically, carrying out KYC/KYB/AML processes has been a time-consuming and resource-intensive endeavor for both parties.

However, thanks to the latest digital innovations in the RegTech space, wealth management firms can now offer a seamless and efficient digital KYC onboarding experience. This reduces compliance cost, onboarding time, and provides a better customer experience.

Interested in using KYC-Chain for your firm’s KYC onboarding needs? Get in touch and we’ll be happy to arrange a demo.

This monthly update is about the importance of effectively recognizing and understanding integrity risk in order to fulfill your financial crime compliance obligations.

The way to achieve this is through education. Our friends at i-KYC are specialists in this field, providing learning formats that seek to:

i-KYC approaches compliance from a commercial and operational point of view, to help strike a safe balance between business needs and regulatory obligations. They focus on training; all-staff awareness training, training for specialists in any area of a financial institution and at any level in the organization. 

Their training sessions on topics related to financial crime compliance are given in classrooms, over video and via e-learning.

i-KYC courses cover all aspects of financial crime compliance, ranging from AML, CFT, Sanctions, KYC, Proliferation Finance and TBML to fraud, bribery and corruption — as well as related courses on crypto, cybersecurity and workplace behavior. There are generic courses and courses for specific countries, industries or sectors (like PSPs) in a variety of languages.

One specific sector looks at KYC AML For Payment Service Providers (PSPs), which ties in with KYC-Chain’s understanding of the KYC/AML issues PSPs need to be aware of — and how to provide automated KYC technology to ease the process for them. You can read more on this topic in our previous article

If you would like to know more about i-KYC training courses, you send an email to info@i-KYC.com. Or Get in touch with us and we can tell you more about how KYC-Chain can provide a market-leading KYC solution for your business.

This monthly update covers some of our new upgrades, KYC for crypto wealth funds and PSPs:

Upgrade to Version 5.3.0

KYC-Chain continues its rollout of new features with Version 5.3.0 – our most advanced, efficient and comprehensive onboarding system to date. This upgrade includes the following new features:

KYC for Digital/Crypto Wealth Funds and Custodians

Crypto wealth funds and custodians are specialized financial professionals who help individuals, businesses and institutions manage their cryptocurrency investments. Like other regulated VASPs, they also need to implement robust and effective KYC measures as part of their AML compliance framework.

Read more here.

KYC AML For Payment Service Providers (PSPs)

PSPs need to carefully implement KYC/AML strategies and fraud prevention approaches on their clients in order to remain compliant with evolving regulations such as the EU’s 5AMLD and MiCA. This can become increasingly difficult as real-time payments grow in volume and geographic reach.

In this article, we take a look at some of the KYC/AML issues PSPs need to be aware of – and how automated KYC technology can ease the process for them.

Need a market-leading, dynamic KYC onboarding solution for your business? Get in touch and we can talk about how KYC-Chain can make it happen.

3 Key Components of Effective KYC AML Compliance

What is KYC?

Know Your Customer (KYC) refers to a set of practices and procedures that are used to understand a customer’s identity and activities and assess their risk from an Anti-Money Laundering (AML) perspective. Implementing effective KYC is often required by law for many companies such as Financial Institutions (FIs), Virtual Asset Service Providers (VASPs) and other regulated businesses. KYC for regulated businesses usually involves the following processes: 

1) Identity Verification (IDV) 

IDV is a process of identifying and verifying who a customer is. In the US, it’s known as a Customer Identification Program (CIP), and is set out in regulations such as the Patriot Act as a key element of preventing money laundering, terrorist financing and other financial crimes such as fraud and corruption. 

Other countries and jurisdictions have their own versions of IDV enshrined in their AML regimes. The vast majority of countries in the world have committed to implementing the recommendations from the Financial Action Task Force (FATF).

Beyond authenticating a customer’s identity, the next major objective of IDV is to create a foundation for establishing an accurate risk assessment and profile for them.

2) Customer Due Diligence

The process involves assessing all of the risks associated with a client or business relationship. It includes carrying out Know Your Customer (KYC) checks, which are then followed by analyses of overall client conduct, their transactional history and behavior and other key indicators to determine if they are suspicious and indicative of heightened risk to your business –-- such as if they are classified as a politically exposed person (PEP) or are on any international or national watch lists and sanctions lists. 

Companies that offer financial services are usually obliged to carry out CDD as part of their AML compliance and anti-fraud protocols.

CDD can be separated into three tiers: 

  1. Simplified Due Diligence (SDD) is carried out on individual or business customers that are deemed to present a low AML risk, such as those with low value accounts in highly regulated and transparent jurisdictions.
  2. Basic Customer Due Diligence (CDD) refers to the process of collecting baseline information on customers to verify their identity and assess their associated risks. 
  3. Enhanced Due Diligence (EDD) involves carrying out more detailed checks on a customer and their background, and is usually reserved for those that are deemed to be high risk. EDD can involve searching relevant litigation records, credit histories, PEP, sanctions and watchlist screenings, and adverse media searches.

3) Ongoing monitoring

Ongoing monitoring involves carrying out periodic checks to identify risk factors such as: 

If suspicious activity is detected, this might prompt further EDD and/or the submission of a Suspicious Activity Report (SAR) to relevant regulatory authorities.

The good news is that these processes can in most cases be covered by automated digital KYC technologies that quickly carry out multiple necessary checks on customers, smoothing and expediting the onboarding process. This makes for both better customer experiences and allows FIs, VASPs and other regulated businesses to quickly scale both in their home countries and in new foreign markets.

Need a market-leading, dynamic KYC onboarding solution for your business? Get in touch and we can talk about how KYC-Chain can make it happen.

As we move into the new year, at KYC-Chain we’ve been accelerating our new feature releases and upgrades, bringing a powerful new suite of tools to our onboarding platform.

Towards the end of 2022, we launched our 'Instant Company Structure Visualization tool'. This allows users of our end-to-end workflow solution to quickly and easily visualize all entities’ relationships and Ultimate Beneficial Owners (UBOs) / principals via a fully dynamic, on-the-fly company structure chart/organigram. It’s a powerful and highly useful utility for businesses seeking to onboard clients or customers with complex ownership structures – or operations and footprints in diverse markets.

We’ve also developed a new feature – “Manager Create/Fill” – which allows managers and admins to answer questions and upload forms & documents in the management app on behalf of their customers.

Additionally, our Applicant Management tool allows managers to delete existing applications when needed.

2022 was thrilling and we’re very excited to keep the momentum going with new launches and features as we head into 2023.

From all of us at KYC-Chain, we’d like to thank all of our clients and community for being with us on this journey, and look forward to continuing to provide the most innovative and effective KYC solutions on the market for you in 2023.

Meanwhile, we wish you a safe, happy and healthy Christmas and New Year holidays from the KYC-Chain team! We look forward to staying in touch to help support your onboarding needs in 2022!

This monthly update covers some of the key AML and KYC regulations that apply to fund managers and administrators globally.

As the global financial services industry continues to expand and become more internationalized – with investment funds increasingly looking to diversify their portfolios across sectors and national economies – the compliance challenge is becoming more complex and onerous. Despite international AML regulations and protocols such as those issued by the Financial Action Task Force (FATF), national AML regulations vary significantly across national jurisdictions.

In addition to the complexity of navigating these diverse regulations for fund managers with an international footprint, criminals are also exploiting the transnationalization of finance. In parallel, the many new technologies that are constantly being developed for investing and transacting are constantly being used to illegally capitalize on loopholes, bypass AML laws and make the most of regulatory voids.

KYC & AML for Fund Managers

In order to meet the multi-layered and constantly-evolving AML requirements of overlapping regulatory agencies, financial institutions (FIs) such as fund managers need to carry out diligent and effective KYC and Know Your Business (KYB) processes on their investors. This can help them prevent their services from t being used as a conduit for money laundering and other forms of financial crime.

An effective KYC/KYB program can generally be separated into three main components:

  1. Customer/investor identity verification (IDV) – establishing and verifying the identity of a customer (by validating their government issued IDs and carrying out selfie checks if they are an individual — or running corporate registry screening and checks if they are a business)
  2. Customer Due Diligence (CDD) – carrying out checks to ensure the customer has not been implicated in financial crimes in the past and is not on sanctions and other watchlists. This also includes ascertaining who a company’s UBOs are and assessing their risk profile.
  3. Ongoing monitoring – carrying out checks at consistent intervals after they have been onboarded in order to ensure that their transactional behaviour or status has not altered their risk profile.

Are you a fund manager looking for a KYC/KYB solution to meet all of your AML requirements? Get in touch and we’ll be happy to help you.

This monthly update looks at our latest instant company structure visualization feature.

KYC-Chain’s constantly-expanding technological toolset for carrying out both individual and corporate KYC now includes an instant corporate structure visualization tool.

Our end-to-end workflow solution now allows our users to visualize all entities’ relationships across applications and roles, via a fully-dynamic, on-the-fly company structure chart – aka an organigram. 

This system allows for the visual identification of any anomalous or suspicious behavior across corporate structures, to assess their corporate and jurisdictional reach, as well as to check the ultimate beneficial owners (UBOs) of an entity being assessed.

The feature can be applied on any corporate entity type being assessed through the KYC-Chain portal. Doing so can reveal the entire network of related parties and entities, including affiliates, subsidiaries, company directors and UBOs – all within a matter of seconds.

This module also provides a very powerful “bird’s eye view” – allowing users to view the various relationships and interactions of an entity in detail across its entire corporate network. This allows users to instantly view the various risk levels that they are exposed to through the multiple relationships of an entity across corporate structures.

If you’re interested in learning more about KYC-Chain or the new instant company structure visualization tool, get in touch, and we’ll be happy to help you.

As the blockchain space continues to evolve, new platforms and innovations are constantly changing the way value is created, traded and protected. 

This monthly update looks at KYC for blockchain games: 

Blockchain games – commonly referred to as NFT or crypto games – are video games that incorporate cryptography-based blockchain technology. Blockchain games typically use cryptocurrencies or NFTs that players can buy, sell, earn and trade with other players. These cryptocurrencies and NFTs can then be used to make in-game purchases. Blockchain games that allow players to earn native NFTs or cryptocurrencies by playing the game are known as play-to-earn or P2E. 

What this all means is that blockchain games are blurring the line between gaming and finance. Using a P2E platform, users can now effectively earn or buy in-game tokens, cash them out for more liquid ERC20 tokens, which can then be sold for fiat. This system is creating a whole new host of opportunities for gamers to earn incomes from gaming – but is also creating new possibilities for criminals to launder illicit proceeds through P2E platforms.

While video game providers previously did not have to consider aspects like Anti-Money Laundering (AML) and Know Your Customer (KYC) responsibilities – as they did not offer any virtual assets – games that offer the chance to buy, earn, trade and sell in-game tokens need to comply with global AML regulations and reporting standards.

Case study: Forgotten Chain

KYC-Chain has recently partnered with Forgotten Chain, an innovative, blockchain-based gaming platform that is also offering its users the chance to earn and trade its native tokens and NFTs. 

Forgotten Chain presents an impressive break from what most blockchain-based games have so far offered. 

The gameplay is as complex and multilayered as is to be expected from a massively-multiplayer online role-playing game (MMORPG) in 2022, but has the added power of allowing its users to earn “Forgotten Coin” tokens through their performance in the game. 

These can then be used to buy Forgotten Chain NFTs, which can be traded both within the game and out on the external NFT market. 

Forgotten Chain is also issuing limited numbers of tokens for sale in private and public ICOs. In order to ensure compliance and to properly vet their prospective investors, they have opted to use KYC-Chain’s onboarding platform. 

This allows Forgotten Chain to quickly and securely ascertain the identity and understand the risk profile of individuals who want to gain access to its NFTs – either through in-game earning or through its public and private ICOs. In addition to facilitating Forgotten Chain’s compliance with constantly-evolving global financial regulations, it also secures the platform against being defrauded by sham investors or malicious actors. 

To find out more about the Forgotten Chain project and its ICO, check out their whitepaper here

And if you want to find out more about how KYC-Chain can allow your blockchain gaming platform to onboard users, players and investors securely and efficiently, get in touch and we’ll be happy to start a conversation.

What’s new?

KYC-Chain is excited to announce a new ongoing AML monitoring feature integrated with our customer onboarding platform.

Global KYC AML regulations require all Financial Institutions (FIs) and Virtual Asset Service Providers (VASPs) to carry out proper customer due diligence as part of their Customer Identification Program (CIP). This includes identity verification and a sanction, PEP, and adverse media screening on all retail customers and corporate/institution clients.

But to remain compliant, companies also need to regularly update client records to ensure customers do not pose a new or increased AML risk. AML monitoring is the process of keeping a regular check on all customers, ensuring any changes to their status that could result in a new or increased risk are identified and acted upon.

With KYC-Chain’s AML Monitoring tool, companies can quickly and easily configure their ongoing monitoring to carry out AML checks of onboarded customers at customized frequencies (daily/weekly/monthly/quarterly/annually) based on risk levels (low/medium/high). This allows businesses and their compliance teams to have current,  consistent, and accurate reports on customers’ risk profiles.

New partnerships

KYC-Chain <> Darkpool ventures

We are thrilled to announce that KYC-Chain will be partnering with Darkpool Ventures, one of the most popular digital asset market-making firms.

Through the partnership, KYC-Chain will provide Darkpool Ventures with KYC (Know Your Client) & KYS (Know Your Supplier) solutions using its state-of-the-art proprietary software, keeping Darkpool Ventures ahead of the regulatory and compliance curve.

KYC-Chain <> Forgottenchain

KYC-Chain partnered with ForgottenChain, a blockchain-based play-to-earn massively multiplayer online role-playing game (MMORPG).

The partnership involves KYC-Chain providing KYC solutions to ForgottenChain for their regulatory-compliant ICO. Using its state-of-the-art proprietary software, KYC-Chain has equipped ForgottenChain with the KYC systems and processes to meet the regulatory and compliance requirements for their ICO.

If you’re interested in learning more about KYC-Chain, get in touch, and we’ll be happy to start a conversation.

This monthly update takes a look at FINMA Regulations for Crypto Companies in Switzerland:​

Perhaps more than any other nation, Switzerland is known for its banking sector. While the country has been a global financial hub for centuries, it’s also now home to more than 900 blockchain businesses. This vibrant crypto scene is closely connected to Swiss crypto laws that take a positive approach towards digital ledger technologies (DLT). 

Acting on significant pressure from global financial regulators and powerful governments seeking to rein in money laundering in their own jurisdictions, the Swiss financial sector has been undergoing a major shift over the past two-and-a-half decades. In 2002, the Swiss government established the Swiss Financial Market Supervisory Authority (FINMA) as a private, independent regulatory body.

VASPs (Virtual Asset Service Providers) looking to be based in Switzerland need to apply for a license from FINMA. In order to meet FINMA’s requirements, VASPs need to carry out Enhanced Due Diligence (EDD) and stringent KYC (Know-Your-Customer) checks with respect to AML (Anti-Money Laundering) and CFT (Combatting the Financing of Terrorism). 

In order to comply with FINMA regulations, crypto companies doing business in the country –need to follow compliance protocols that include:

In 2016, the Swiss Financial Market Supervisory Authority (FINMA) started allowing Swiss-based financial institutions to use online identity verification to fulfill Swiss Anti-Money Laundering Act due diligence requirements. 

This means that customers can now be verified remotely and no longer need to visit a local branch in order to open an account.How KYC-Chain can help

KYC-Chain’s identity verification solutions use AI, machine learning, face-based biometrics and liveness detection to ensure the person behind a transaction is present and who they say they are. Identity verification goes well beyond traditional authentication methods to deliver a significantly higher level of assurance and establish a trusted digital identity.

Using market-leading technology such as KYC-Chain can allow projects and companies to quickly and easily attain compliance with FINMA and FATF regulations using a seamless and automated process.

Interested in using KYC-Chain to reach FINMA compliance? Get in touch and we’ll be happy to start a conversation.

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