Ground fighting is hand-to-hand combat. It is on the ground. It is a term used in mixed martial arts. Do you remember Israel Adesanya of the Ultimate Fighting Championship fame? Other combat sports use ground fighting. It is a set of grappling techniques. It is the focus of Brazilian Jiu-Jitsu. It comes in varying degrees in Catch-wrestling, judo, jujutsu, sambo, and shoot. It is useful in some schools of Shuai Jiao and other styles of wrestling.
On The One Hand
The fighting ground of all fintech and alternative banking services providers is customer onboarding. To succeed in this fight, strict adherence to KYC measures prevails. Tension abounds. Pressure heightens. Research has shown that as KYC banking regulations heat up, fintech and banks are under pressure. Because financial crime is increasing. The challenges for banks and fintech to be compliant have also surged.
On The Other Hand
“The central pillar of KYC is validating the authenticity of a new customer during the onboarding process. Business onboarding involves untangling complex business structures. And identifying the ultimate beneficial owner. This part of the KYC process in banking is online. This is due to the onboarding standard of automatic video identification,” a report by Electronic IDentification disclosed.
The RegTech firm detailed how new KYC requirements for banks are helping in the longstanding battle with the scourge of financial crime. It shared that financial service providers play a key role. This role has helped to stop the proliferation of dirty money from getting into the global financial system. As such, developing a nuanced understanding of what KYC entails in banking and fintech is imperative for all financial service providers.
In The Long Term
In “How KYC Requirements for Banks are helping to Fight Financial Crime,” the report stated that with challenges from financial crime on the increase, regulators such as the Financial Action Task Force (FATF) have already upped their compliance measures. It has called on firms to adopt RegTech solutions as best practice for KYC compliance.
The initial customer onboarding is the first step in KYC bank compliance. Customer due diligence should be performed regularly. Depending on the risk that was determined during onboarding, the frequency and intensity of bank KYC can increase. “The customer’s risk assessment level feeds into anti-money laundering (AML) continuous monitoring with AML rules becoming stricter for riskier customers,” it announced.
The report mentioned that maintaining strict adherence to KYC compliance is necessary. Not only for the huge financial penalties, but also for avoiding the reputational damage associated with money laundering scandals.
Many KYC processes aim to triage customers according to their relative risk for banking and financial service needs. KYC documents provide banks with the proof required for identification verification. And customer risk assessment. The complexity of documents required has increased for banks and fintech companies aiming to operate globally. Now, every country and each jurisdiction in a country has different document requirements in different languages.
The report claims, screening thousands of documents in hundreds of languages is difficult. It is beyond the capacity of a human-powered KYC team. For financial institutions aiming to expand globally, an AI-powered KYC solution, a qualified electronic signature, has become the ‘simplest and most cost-efficient way to maintain compliance’.
Mojisola Sonde, writing in complianceinafrica.com, said KYC has one goal. To prevent the banks and fintechs from being used intentionally or unintentionally by criminals for money laundering.
In The Short Term
Are you sure illicit funds do not pass through banks or fintech? Are fintech’s customer identification programmes (CIP) thorough? Do you want to pick a fight?
