With the stakes for asset managers high when it comes to Know Your Customer (KYC) and Anti Money Laundering (AML) processes, there is a stumbling block towards automation which is having a significant impact on cost and risk.
Global Investor recently caught up with Justin Hayes, Product Manager at Linedata on the challenges the industry faces when it comes to automating these time consuming and manually intensive processes.
What are the main challenges to automating AML KYC processes?
- The nature of the data gathering and analysis as well as the level of oversight required make automation difficult.
- Different information is required for each type of investor in order to pass the necessary compliance checks meaning atomation programs require the ability to handle significant complexity.
- The consequences of AML / KYC violations are increasingly severe regulatory fines and reputational damage is a real threat, therefore trust in any system is a big factor.
What does the future for automating AML KYC look like?
- AML / KYC regulation is rapidly evolving. Financial instututions must be able to adapt to the increasing sophistication of money launderers across the globe. Without automation the processes will remain cumbersome.
- Blockchain and DLT technologies offer a possible way to digitally address compliance through the use of blockchain security keys.
- The financial community must have greater common acceptance of blockchain security keys as a potential solution to automating KYC / AML compliance.
Read the full article sharing Justin's insights in Global Investor here.