The objective of KYC guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Related procedures also enable banks to better understand their customers and their financial dealings. This helps them manage their risks in a well-judged manner. Today not only the banks but also different online businesses can implement KYC. They usually frame their KYC policies incorporating the following four key elements:
- Customer Acceptance Policy;
- Customer Identification Procedures;
- Monitoring of Transactions; and
- Risk Management
NovaTech aims to minimize the risk of fraud, by identifying suspicious elements earlier on in the client-business relationship lifecycle. For the purposes of a KYC policy, a customer/user may be defined as:
- any person or entity that maintains an account and/or has a business relationship with NovaTech
- one on whose behalf the account is maintained (i.e. the beneficial owner);
- beneficiaries of transactions conducted NovaTech
- any person or entity connected with a financial transaction which can pose significant reputational or other risks to NovaTech, for example, a wire transfer or issue of a high-value demand draft as a single transaction
KYC controls typically include the following:
- Collection and analysis of basic personally identifiable information.
- Screening of identity particulars (PII) against global watch-lists to determine the status of public exposure (politically exposed person or PEP) and adverse media.
- Determination of the customer's risk in terms of the tendency to commit money laundering, terrorist finance, or identity theft.
- Creation and assessment of a 'Customer Profile' on the basis of a customer's transactional behaviour
- Monitoring of a customer's transactions against expected behaviour and recorded profile as well as that of the customer's peers