Transcript The Discipline of Market Leaders (Michael Treacy & Fred

KYC for Banks & Risk-Based Approach
Presented by: Ali Al-Qahtani
Head of Anti Money Laundering
March 2010
Contenet
• What KYC Means?
• What is a Risk-Based Approach?
• Why a Risk-Based Approach?
• How to Establish a Risk-Based Approach?
• Risk Based Apporach Model
What KYC Means?
KYC is one of the top key elements of the AML Compliance
Program:
•
Know? What you should know?
True identity and personal information, address, financial information
and beneficial ownership of the accounts
•
Your? Who should know?
Branch employee, Relationship manager, all Bank employees.
•
Customer?
One who maintains an account, establishes business relationship, on
who’s behalf account is maintained, and one who carries potential risk
through one off transaction.
-- It is important to have the customer regularly updating his/her information --
What is a Risk-Based Approach?
 Identify, mitigate and manage the money laundering and
terrorist financing risk.
 Appropritae controls & systems
 Ongoing monitoring of customer profile & activities
Why is a Risk-Based Approach?
 Prevents money laundering rather than identified after the
fact happens.
 Prevents reputational damage to the institution.
 Provides financial institution with a deeper understanding of
overall risks taken on their side.
 Avoids Regulatory penalties
 Maintains customer confidence.
How to Establish a Risk-Based Approach?
Four main components need to be taking into consideration:
 KYC & CDD
 Monitoring of customer & account activities
 Reporting of suspicious activities
 Training & awareness
Risk Based Approach Model
Customer
Profiling
Legal Entity, Nationality ,Occupation ,Income
Monitoring
Customer
Activities
Cash Deposit
Transactions
KYC & CDD
Transfer
Profiling
Utility Bills
High Risk
Individuals
PEP’s
PBK
Charities
Corr. Banks
Corporate
Channels
Branch, ATM, Tele-Banking, Internet Banking
Local
Remittance
International
POS
Products &
Services
Credit Card
Internet
Reporting
Suspicious
Activities
(SAR’s)
Trade Services
Treasury
Training & Awareness
LC/LG
FX/MM/SAWPS
Thank you for your
time & attention