Know Your Customer

What is KYC?

Know-Your-Customer (KYC) legislation has been introduced in most major financial centres across the globe. Such legislation is driven by recommendations and standards set by the Financial Action Task Force (FATF). The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.   Read more on the FATF website.

The risk-based approach

A fundamental feature of the latest recommendations from FATF, which led to many countries amending their KYC laws, is the migration from a rules-based approach to a risk-based approach. This is seen as a major enhancement of all previous anti-money laundering (AML) strategies. The rules-based approach involves Accountable Institutions (AI) taking ownership of the crucial roles they play in protecting the integrity of the global financial system.

Key aspects of the Amendments are:

The introduction of the Risk Management and Compliance Programme (RMCP).

The extension of the Know-Your-Customer (KYC) obligations.

RMCP

RMCP is an articulation of the procedures that the accountable institution will employ to satisfy its KYC obligations and KYC compliance under the new amendments. This ensures that the accountable institution adheres to its own RMCP design, as well as ensuring that the RMCP design is in sync with international AML requirements.

Know-Your-Customer (KYC) obligations

The amendments have substantially extended the KYC obligations, particularly where trusts, partnerships and juristic persons (a human being (natural person) or a group of human beings, a corporation, a partnership, an estate, or other legal entity (artificial person or juristic person) recognised by law as having rights and duties) are concerned, whereas previously the KYC duty was confined to the identification of the client and the confirmation that it exists.

Accountable Institutions must dig deeper and inquire into matters such as the nature of the client’s business operations, and the identity of its ultimate beneficial owner (UBO), being the natural person who ultimately benefits from the client’s assets and profits.



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Digital KYC

The Objective

The objective of SigniFlow’s KYCFactory system is to deliver a compliant, automated and fully digitised KYC system that caters for both juristic and natural persons, in a manner that is aligned with any RMCP and that can integrate with any rules engine, enterprise services bus (ESB) or workflow engine, to trigger events.

A Business entity consists of the entity itself, as registered with the companies registrar, as well as associated individuals (natural persons), whether principle members (Directors), Trustees, UBOs or other parties identified by board-resolution (Signatories), all of which are catered for by the System. Although similar in approach, the business entity has certain verification requirements that are different in comparison with that of a natural person. The business entity process breaks out into multiple verifications for each associated natural person (Directors, UBOs, Signatories, etc).

The business itself is therefore subject to verification methodologies designed to verify the entity, including natural persons linked directly, or by association, to that entity. Each natural person associated with the business entity is individually verified. Sole Proprietors that are classified as business entities are verified as natural persons.

KYCFactory can be triggered from any website or forms-based front-end, ESB, rules engine or workflow engine that has the ability to communicate via web services. Triggers are sent via the SigniFlow Event Handler to the KYCFactory platform, which then either follows a built-in configuration of events (“IF-THEN” rules for pass and fail events), or every event is communicated back to the origination platform via the SigniFlow Event Handler, enabling it to query its own rules and sequences in order to trigger further events individually, as  micro-components.

The KYCFactory software is delivered in two main process components, defined as Identity Kits (IDK), namely Business IDK and Consumer IDK.



KYC Business Declaration

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The only true digital and fully automated e-KYC system featuring robust compliance in the back-end with a superb, smooth and flowing front-end user experience that binds the signatories to KYC processes.


Business IDK

The Business IDK is created by verifying the business credentials and trading address using various trusted third-party data sources:


  • Business verification

    Verification of company data against verified company registrar data
    Verification of Business Principles (Directors)
    Verification of Auditors information
    Data comparisons of registered business address

  • Google Geo-presence

    Google – Places Search & Compare
    Google – Places Detailed Search & Compare
    Google – Panorama
    Google – Vision

  • Web Source

    A fast and powerful crawl engine built to search, compare and verify Internet presence of an entity.

  • Registered and Verified

    GLEIF – An international database of verified businesses
    SSL Certificate – Check entity website certificate for ownership verified by a trusted Certificate Authority
    WHOIS – Check World Wide Web domain registrars for domain ownership by the entity

  • Geolocation

    IP Geolocation – Geolocation tracking at time of registration and KYC

  • Social Presence

    Search, find and compare business data found on social media sites like Facebook, LinkedIn and Twitter

  • Sanctions List

    Screening against international targeted financial sanctions list


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KYCFactory KYC AML Solution
 

KYC Consumer Declaration


Consumer IDK

The consumer IDK is created and verified using the following technologies and data sources:

    • Proof of Life

      Liveness test – Robust cutting-edge 3D Facial Biometric liveness test

    • ID Document verification

      More than 200 Countries’ national Identity Document, drivers license and passport verification with photo matching and document authentication check

    • Identity verification

      Identity data verification available in 31 countries

    • PEP

      Politically Exposed Persons (Incl DPIP and FPPO) screening.

    • Adverse Media

      Scrapes through billions of news articles where negative content was recorded.

    • Sanctions List

      Screening against international targeted financial sanctions list

    • Consumer Address

      Automated digital address verification against hundreds of third-party trusted sources.


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    A truly digital KYC system with robust compliance that sits behind a paperless, automated and fast customer experience.




    Fast, effective, fully automated paperless KYC, aligned to your business processes and your RMCP.



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