Understanding AML Compliance Programs

An anti-money laundering compliance program is a comprehensive framework of policies, procedures, and controls that financial institutions and businesses establish to detect, prevent, and report instances of money laundering and terrorist financing. These programs ensure compliance with applicable laws and regulations and safeguard the financial system’s integrity.

The primary objective of an AML compliance program is to identify and mitigate the risks associated with money laundering activities. By implementing effective AML measures, financial institutions can protect themselves from becoming unwitting accomplices to criminal activities, avoid severe legal and reputational consequences, and contribute to the overall integrity of the global financial ecosystem.

In the following sections, we will explore the best practices that underpin effective AML compliance programs, including risk assessment, written policies and procedures, customer due diligence, ongoing monitoring, employee training and awareness, and independent audit and review. By understanding and implementing these practices, organizations can establish robust defences against money laundering and significantly contribute to combating financial crime.

Best Practices for Effective AML Compliance

Risk Assessment: Conducting a comprehensive risk assessment is the foundation of any successful AML compliance program. This assessment involves identifying and analyzing the potential money laundering risks associated with the institution’s customers, products, services, and geographical locations. By understanding these risks, organizations can tailor their AML strategies accordingly.

Written Policies and Procedures: Developing clear and concise written policies and procedures is vital for effective AML compliance. These documents should outline the institution’s commitment to AML compliance, define the responsibilities of employees, and guide identifying and reporting suspicious activities. Regularly reviewing and updating these policies is essential to keep up with evolving regulatory requirements and emerging risks.

Customer Due Diligence (CDD): Implementing a robust CDD process is crucial for AML compliance. This involves assessing customer risk profiles, and monitoring for suspicious activities. Enhanced due diligence measures should be applied to high-risk customers, such as politically exposed persons (PEPs) and those from jurisdictions with weak AML controls.

Ongoing Monitoring: Establishing a system for ongoing monitoring of customers is essential. This involves implementing automated monitoring systems that can flag unusual patterns or activities. The monitoring process should be proactive, timely, and capable of detecting complex money laundering schemes.

Employee Training and Awareness: Educating employees about AML regulations, procedures, and emerging risks is crucial. Regular training programs should be conducted to ensure employees stay updated with evolving threats and compliance requirements. Encouraging a culture of vigilance and providing channels for reporting suspicious activities can empower employees to play an active role in preventing money laundering.

Independent Audit and Review: Regular audits and reviews of the AML compliance program are essential to identify weaknesses or gaps. External auditors can objectively assess the program’s effectiveness and offer recommendations for improvement. These audits help organizations comply with regulatory standards and enhance their AML efforts.

Benefits of AML Compliance Programs

AML compliance programs offer numerous benefits beyond the primary function of monitoring and detecting suspicious financial activities. Let’s explore some of these advantages:

Enhanced Reputation: Implementing a robust AML compliance program helps build trust and credibility among customers, investors, and stakeholders. It demonstrates a commitment to ethical business practices, regulatory compliance, and the fight against financial crime. A strong reputation for compliance can attract new business relationships and enhance existing ones.

Regulatory Compliance: AML compliance programs ensure adherence to relevant laws, regulations, and guidelines imposed by regulatory bodies. Organizations can avoid penalties, fines, and legal repercussions by staying compliant, protecting their financial stability, and avoiding potential damage to their reputation.

Risk Mitigation: AML compliance programs are designed to identify and assess risks associated with money laundering and terrorist financing activities. By understanding these risks, organizations can implement effective risk mitigation strategies. This proactive approach reduces the likelihood of being involved in illicit activities and minimizes associated risks.

Protection from Reputational Damage: Money laundering activities can tarnish the businesses’ reputation, leading to significant financial losses and loss of customer trust. AML compliance programs protect against reputational damage by preventing illicit funds from entering the organization, ensuring the company’s integrity remains intact.

Global Market Access: AML compliance programs enable organizations to access global markets and establish relationships with international partners. Many countries require compliance with AML regulations for conducting cross-border transactions. By adhering to these regulations, organizations can expand their market reach and seize international business opportunities.

Final Words!

In an ever-evolving landscape of financial crime, an effective AML program is a powerful shield to protect the integrity of financial institutions and the global economy. By following best practices, organizations can bolster their defences against money laundering and terrorist financing. With these measures in place, organizations can contribute to the fight against money laundering and fortify the financial system against criminal exploitation. Together, we can build a more secure and transparent future for global finance.

KYC2020 is vital in supporting financial institutions’ anti-money laundering compliance programs. By implementing KYC2020, institutions can access advanced AML Screening tools, robust data analysis, and enhanced risk assessment capabilities. This empowers them to efficiently identify and verify high risk customers, detect suspicious activities, and ensure compliance with AML regulations, safeguarding against financial crimes.

The initial part of implementing risk management strategies is customer onboarding which must involve screening for Sanctioned Individuals and Entities (SIEs), Politically Exposed Persons (PEPs), and adverse media. In this comprehensive guide, we mention the importance of screening, explore the world of Adverse Media, Sanctions, and PEP screening, and offer insights into implementing effective screening techniques for enhanced risk mitigation.

Understanding the Importance of Screening in Customer Onboarding

Why is Screening Essential?

In an era where financial crimes and reputational risks are rampant, screening customers for PEPs and Sanctions checks is vital. By conducting thorough due diligence, businesses can mitigate financial crime risk, protect their reputation, and ensure compliance with regulatory obligations. Effective screening allows for identifying high-risk customers, assessing their potential involvement in illicit activities, and making informed decisions during customer onboarding.

Compliance and Regulatory Requirements

Stringent regulations, such as Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) laws, mandate the screening of customers against SIEs and PEPs. Financial institutions and businesses must comply with these regulations to avoid hefty penalties, legal consequences, and damage to their reputation. Additionally, regulatory bodies often issue sanctions and embargo lists highlighting individuals, entities, and countries involved in prohibited activities. By screening against these lists, organizations can ensure compliance and mitigate risks associated with these sanctioned entities.

Unraveling the World of Sanction, PEP, and Adverse Media

1. Sanction Screening: Identifying High-Risk Entities
Sanction screening involves comparing customer data against official sanction lists, which include individuals, entities, and countries subject to financial and trade restrictions. Governmental bodies, international organizations, and regulatory agencies issue these lists. By implementing an effective sanction screening process, businesses can identify and flag high-risk entities, preventing potentially illegal transactions and safeguarding themselves from legal and reputational damage.

2. PEP Screening: Mitigating the Risk of Corruption
Politically Exposed Persons are individuals who hold prominent public positions or have close associations with such individuals. Due to their elevated positions, PEPs are at a higher risk of being involved in corrupt practices, money laundering, and bribery. Screening customers for PEP checks is crucial in assessing the risk associated with their involvement in illicit activities. Implementing robust PEP screening measures allows organizations to make informed decisions, exercise enhanced due diligence, and safeguard against financial and reputational risks.

3. Adverse Media Screening: Protecting Reputation
Adverse media screening involves monitoring various sources, such as news articles, public records, and social media, to identify any negative or potentially damaging customer information. This screening technique helps protect an organization’s reputation by identifying customers with connections to criminal activities, fraud, or controversial business practices. By conducting comprehensive adverse media screening, businesses can proactively manage their reputation, make informed decisions during onboarding, and safeguard against potential risks.

Implementing Effective Screening Techniques for Enhanced Risk Mitigation

1. Leveraging Technology for Screening
Advancements in technology have significantly improved the efficiency and effectiveness of screening processes. Automated screening solutions powered by artificial intelligence and machine learning algorithms can quickly scan vast databases, identify potential matches, and reduce false positives. Leveraging such technology allows organizations to streamline their onboarding processes, minimize manual errors, and enhance risk mitigation efforts.

2. Conducting Ongoing Monitoring and Periodic Reviews
Screening should not be limited to the initial onboarding process alone. Ongoing monitoring and periodic reviews are essential to ensure existing customers remain compliant and free from new risks. By continuously monitoring customer activities and conducting regular reviews, businesses can detect any changes in risk profiles, identify emerging threats, and take appropriate actions in a timely manner.

Introducing KYC2020 to Streamline Customer Onboarding with Sanction Screening and PEP

KYC2020 is a leading company offering comprehensive Global Watchlist Data, Screening, and Decisioning solutions that can significantly streamline customer onboarding by integrating PEPs and Sanctions checks. With our expertise, we can assist businesses in ensuring compliance with regulatory requirements while efficiently vetting potential customers.

Sanction Screening, a crucial component of KYC2020, allows organizations to identify individuals or entities on global watchlists or sanction lists. Organizations can quickly and accurately screen customers during onboarding by leveraging a vast database of sanctioned individuals. It prevents businesses from engaging in transactions with individuals involved in illegal activities, mitigating financial and reputational risks.

Moreover, KYC2020 includes PEP screening, identifying individuals with prominent public positions or close associations with politically exposed individuals. This screening process helps organizations assess potential risks associated with such customers. By incorporating PEP checks into the customer onboarding workflow, businesses can ensure transparency and integrity, preventing potential involvement in corruption or illicit activities.

By partnering with KYC2020, organizations can automate the customer onboarding process, minimizing manual effort and improving operational efficiency. The solution seamlessly integrates with existing systems, enabling real-time screening and reducing the risk of onboarding high-risk individuals. It saves time and enhances customer experience by expediting the onboarding process.

Conclusion

Effective screening for Sanctioned Individuals and Entities (SIEs), Politically Exposed Persons (PEPs), and adverse media is critical to customer onboarding. Organizations can ensure compliance, mitigate risks, and maintain high due diligence while welcoming new customers by incorporating PEPs and Sanctions checks. KYC2020 provides businesses with a powerful toolset to streamline customer onboarding with Sanctions and PEP screening. By partnering with us, organizations can enhance risk mitigation efforts, comply with regulatory requirements, and protect their reputation in an increasingly complex and challenging business environment. Contact our experts for further details.

In the previous article of the KYC 2020 Guide to PEP Screening, we learned that engaging with PEPs and RCAs who are involved in financial crime can be damaging to your financial institution’s reputation. Although you may already recognize the risk and have tried to address it with legacy screening systems, your current program may not provide enough protection and oversight.

AML/CFT systems and procedures need to protect your financial institution against corrupt PEPs and RCAs. However, these days they must do so while accurately verifying legitimate transactional activity and creating a positive customer experience.

Slow customer onboarding and the constant drumbeat of false positives will eat up your profitability and your competitive advantage. On the other hand, failing to identify corrupt PEPs or RCAs can lead to unwanted regulatory attention and action.

Thanks to AI and advancements in regulation technology (RegTech), screening for PEPs in global watchlists, government sources, and in adverse media is more effective, fast, and affordable than ever before.

Over the next four years, the global RegTech industry is expected to reach $16 billion. Much of this growth is driven by a wave of up-and-coming fintech innovators. These companies are harnessing advanced technologies to make AML compliance more doable and budget-friendly for smaller organizations and FinTech. In the process, they are leveling the playing field for financial innovators against their bigger, more established competitors.

Considerations Before Choosing PEP Data and Screening Solutions

One of the most important things to understand in your search for PEP data and screening solutions is that not all solutions (or vendors) are created equal. Not all solutions will be a perfect fit for your organization, either.

To give your institution a good chance of finding the most suitable tools for the identification and prevention of PEP financial corruption, keep in mind the following three considerations:

1. What are your needs?

Which kinds of PEPs or RCAs do you work with? What types of products or services does your organization offer that would be of interest to them? What is your workflow, and what AML/CFT compliance tools or technologies do you already employ?

Another important point to consider is how much direction and assistance you need to set up and run these tools. At KYC2020, for example, our CAMS and Vskills certified specialists help clients define a risk-based approach to compliance that fits their risk profile. We can also tailor our products to fit established workflows and assist with the integration.

2. What are the specifics of the PEP data and screening solution?

What is the scope of the solution? What methodologies does the vendor use? Does the AML/CFT compliance database go beyond sanction lists and other standard databases? Does the vendor also include other sources of data for PEP identification, such as negative news databases? How much of this data is truly necessary and how well is the data structured and de-duplicated? Does the vendor use advanced technologies such as AI and NLP for identity recognition and resolution? What search technologies does the software use to filter matches? How often is the data updated?

3. What kind of relationship does the vendor offer?

Who is the vendor and how do they work with their clients? Do they have experience working with your type of financial institution, credit union, Fintech company or MSB? Do they offer direct assistance and support to get started or integrate, as mentioned above?

Elements of a Good PEP and RCA Screening Tools

The most reliable, efficient, and modern data screening systems for PEPs and RCAs will include the following three core functions:

Smart Screening and Verification

Your institution is required by law to conduct reasonable procedures to identify PEPs either before a relationship is established or as part of the onboarding process. The quality of such screening, however, depends on the quality of the data you use. PEP and RCA sanctions screening always starts with traditional sanctions lists and Regulatory Authority databases. However, these watchlists are aggregated from thousands of independent sources, are highly unstructured, and are constantly changing. Simultaneously, sanctions are becoming more complex, while the number of regulatory bodies are growing.

In short, maintaining quality data is a resource-intensive challenge.

Given the nature of watchlist data, you must start with a smart watchlist database that is well structured, normalized, and regularly updated to catch true positives while minimizing false positives. This data should be coupled with an intelligent screening engine to help filter, sort and analyze search results.

In the event a firm wants to eliminate the manual effort of clearing false positives and speed up onboarding, they must move from screening to decisioning systems. These smart systems use AI to automatically clear false positives and deliver pass/fail decisions so your organization can speed up its customer onboarding.

The Ability to Conduct Enhanced Due Diligence

Once you have successfully identified a PEP or RCA and have defined the level of risk the individual brings, additional research and analysis may be appropriate. You may want to validate, for example, the individual’s source of funds and/or wealth. The bulk of this added investigation will often include non-watchlist data, such as adverse media screening.

Accounts with a PEP relationship are also subject to enhanced monitoring and periodic review. This helps to ensure that due diligence information remains current and the risk assessment and associated controls remain appropriate.

Automated Processes

Sanction screening still requires a significant amount of manual intervention that can dramatically slow down and disrupt the PEP verification and onboarding processes. False positives in particular will hold your workflow hostage. Most sanction screening systems still yield 5-7% false positives that must be cleared manually by a compliance officer.

Advanced sanction screening solutions leverage latest technologies, such as AI, machine learning, and NLP to significantly reduce such manual intervention. They also go beyond the matching, sorting, and analysis of watchlist data results. Smart solutions, like our DecisionIQ^TM, can render 95% of all verification decisions automatically in under a minute with a low decision error rate.

Each screening decision is accompanied with a transparent ‘Proof of Decision’ that is electronically stored. The Proof of Decision can be electronically reviewed and annotated by a compliance officer. When a PEP or RCA is identified, they can be assigned to different customer lists based on the risk level. These customer lists can then be set up for scheduled or active ongoing monitoring and alerts. All this can be done via an easy to access online user interface, or via an easy to integrate API library.

Just imagine what your institution could do with all the time, money and other resources that would be freed up under such a system! Decision-making would be a lot more accurate, too.

The point is PEP data and screening solutions are evolving, just as the regulatory environment and even the world itself shifts and transforms. When you are in search of AML compliance tools of any kind, you need to partner with an AML compliance vendor that understands the winds of change. This knowledge should be worked into their collection of solutions. In the financial services sector, such partnerships are what it takes to stay in the game.

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In the previous article of the KYC 2020 Guide to PEP Screening, we learned about the many uncertainties surrounding PEPs, including how to even define them. In this article, we are going to take a closer look at PEP risk.

The Challenge of Serving PEPs

In Ontario, Sanjay Madan, a Ministry of Education computer specialist was recently fired after an alleged fraud involving $11.6 million in COVID-19 funds. Madan is also being accused of running an elaborate kickback scheme that stole at least $30 million more from the Canadian government.

Meanwhile, in the US, Tennessee state senator Katrina Robinson was recently charged with theft and embezzlement. According to court records, Robinson stole more than $600,000 in federal funds while serving as the director of a health care company. She then used this money to pay for her wedding, a new vehicle for her daughter, entertainment and various other personal expenses.

In the US and Canada and throughout the world, there are countless high-profile examples of PEPs using financial institutions as conduits for their illegal activities.

For this reason, PEPs and their relatives and close associates (RCAs) generally present a higher level of risk to your financial institution. When people are in positions of influence and power and have access to insider information, there is a greater chance that they will abuse their privileges. PEPs can end up leveraging their status for personal gain through bribery, money laundering, and corruption instead of benefiting those they are meant to serve.

PEP corruption undermines the rule of law. If left unchecked, corrupt PEP behavior can be detrimental to the overall health of the economy. It can drain a state or a country’s assets, compromise judicial and governmental systems, hurt fair commerce, and extinguish open competition.

It also can spell the end of your financial institution. Banks, credit unions and money services businesses (MSBs) that conduct business with dishonest PEPs face substantial reputational risk, additional regulatory scrutiny, and potential regulatory action.

Mitigating PEP Risk Through Red Flags

In the context of KYC and BSA compliance, identifying a client as a PEP or RCA is not the goal in and of itself. A PEP designation also does not mean the individual is necessarily involved in corruption or other forms of criminal activity. It is merely a call for extra vigilance. PEP screening and monitoring is thus one piece of a bigger process to discover and assess client risk.

The truth is that not all PEPs present the same level of risk. This risk will vary depending on numerous factors, including: the PEP’s geographic location, industry, sector, and position as well as the level or nature of the authority invested to this individual. Other factors, such as the type of account and its purpose, the transactional activity, and the complexity of the account, can all influence the risk to your institution when servicing a particular PEP.

PEP screening is a standard part of a risk-based approach to AML compliance. Though this process is usually performed as part of KYC and on-boarding procedures, account monitoring should continue periodically throughout the customer relationship. After determining that a customer is a PEP, your institution is responsible for conducting ongoing due diligence that is specifically tied to the individual’s current PEP status.

If your organization needs to assess PEP risk, then there are several red flags and indicators you can use to detect suspicious behavior and potential financial abuse.

PEPs that exhibit the following behavior or characteristics, should be approached with caution:

• Attempting to shield identity and obscure ownership through the use of corporate vehicles, intermediaries, or family members/associates as legal owners
• Exhibiting odd or suspicious behavior, for example: showing difficulty discussing the source of funding or wealth, providing incomplete or inaccurate information, asking questions about your institution’s AML/CFT policy
• Being involved with an industry or sector that is high-risk, such as arms trade and defense, banking and finance, businesses that sell or work with the government, healthcare, and mining
• Having a position in or an involvement with a business or organization that is operating in a high-risk sector
• Having a high-ranking position with significant authority, such as control over or access to state assets and funds, policies, and operations, as well as control over regulatory permissions like being able to approve an operating license
• Conducting suspicious transactional activities, such as payments and transactions that are anonymous

When on-boarding a client who possesses one or more red flags such as these, you need to proceed with caution. Your AML/CFT systems and procedures should kick in to protect your institution against unscrupulous individuals while verifying legitimate transactional activity and creating a positive customer experience.

To make this possible, you first need to be able to detect and identify PEPs and RCAs. This has traditionally been an expensive and time-consuming undertaking that greatly slows down customer onboarding. As a result, compliance for PEP screening has been lax and irregular across the financial markets. Now, thanks to AI and other advancements in regulation technology (RegTech), screening for PEPs in global watchlists, government sources, and in adverse media is not only effective and fast, but also affordable.

We’ll address the solutions helping to mitigate PEP risk in the next article.

As credit unions continue to grapple with a growing mountain of costly and complex financial regulations as well as an evolving digital ecosystem, they have been ramping up their investment in regulatory technology (RegTech) solutions.

Determining which AML compliance solutions make the most sense for a specific credit union, however, can be a challenge. Over the next four years, the global RegTech industry is expected to reach $16 billion. While there are many established players already in the market, this growth is in large part driven by a rising wave of new RegTech innovators. These companies are harnessing advanced technologies to address a wide range of issues in addition to AML compliance, such as data and network security, user experience, the increasing demand for faster digital transactions, affordability and ease of integration.

RegTech has become mission critical among credit unions seeking support in their AML/CFT compliance efforts. Earlier in this series, we examined the ways in which modern Credit Unions need to rethink their approach to AML/CFT compliance as well as the unique challenges they will face in the process. The distinct path awaiting Credit Unions towards an accurate, cost-effective, and nimble AML compliance regime requires that they look beyond many of the established vendors.

Credit unions do not operate in the same way as banks do. They have their own unique structure, mission, and set of needs. RegTech platforms that prioritize affordability, accuracy, customization, support, and ease of use are better suited to these financial institutions.

Heading into the future, partnerships with RegTech vendors can help to make credit unions more adaptable and competitive in a changing financial services landscape. Many small and mid-sized credit unions today face two options: either adapt to changes in regulation, technology, and financial market trends or be absorbed by a bigger financial institution. Though the Covid-19 pandemic initially slowed down M&A activity among credit unions, all signs indicate that M&As will increase in 2021.

Having smart, customized AML compliance solutions in place is a necessary growth strategy for today’s credit unions. In fact, it could end up being one of the most significant factors in the fundamental viability of the credit union model going forward.

In this final article of our series on AML compliance among credit unions, we will look at three core RegTech solutions that are putting these financial institutions back on the financial services playing field.

3 Smart AML Compliance Solutions for Today’s Credit Unions

A solid AML/CFT credit union compliance program will depend on some combination of three core services:

Moving from Big Data to Smart Data

AML compliance begins with screening clients as part of customer due diligence (CDD). A good sanction, PEP, and adverse media screening program begins with great watchlist data.

Most AML compliance data vendors build and promote BIG DATA. However, when it comes to a given database, bigger isn’t necessarily better. The problem with big data is that it is often full of junk and bloated with duplicates. This unnecessary, incomplete, or unwanted information creates added work for AML compliance staff who must manually reconcile and clear the excessive false positives. Financial institutions typically end up over-engineering their screening systems to deal with junk data to strike a balance between an “acceptable” number of false positives with their efforts to avoid missing true positives.

The beginning of modern KYC and sanctions screenings still starts with sanctions lists, but now extends to other watchlist data, including PEP (politically exposed persons), RCA (relatives and close associates of politicians), HIO, Regulatory Authority, Negative News, and more. These lists are constantly evolving, while sanctions are becoming more complex and the number of regulatory bodies are growing. For credit unions working with limited resources, this big and constantly changing data pool must be augmented and transformed by SMART data systems prior to consumption for screening. SMART DATA leads to INTELLIGENT SCREENING. Solving the data problem is the most effective way to enhance a credit union’s AML compliance program.

For this reason, KYC2020 developed VisionIQ, the most comprehensive, advanced, and affordable watchlist database on the market with access to over 1000 watchlists and over 10,000 automatically updated news sources from more than 200 countries. The VisionIQ data advantage is not just that the data is comprehensive so that a credit union never misses a relevant true positive, but that we spend a great deal of time to make it SMART so that our clients are not dealing with endless false positives.

For a credit union to be served the right data to suit their risk profile, VisionIQ is powered by advanced technologies, such as artificial intelligence (AI) and natural language processing (NLP).

Data is structured and organized to make it easy to selectively group watchlists for different risk profiles and screening criteria. Data is de-duplicated and cross-linked across watchlists to better resolve the data into personas. Data, especially PEP and RCA data, is further augmented by name and entity recognition in relevant adverse media. Personas are also tagged with aliases, common name variants and misspellings to reduce fuzzy search errors and false positives. Plus, we have added machine learning (ML) to the mix which makes the data, and by extension the AI-based compliance system smarter over time.

Best of all, we have priced VisionIQ with smaller financial institutions in mind. Data does not have to be so expensive, and credit unions do not have to compromise quality for good data.

Smart Sanction Screening Solutions

Sanction screening is an integral part of KYC and AML/CFT compliance. Sanction screening systems are designed to protect financial institutions from high-risk customers and help to ensure the integrity of the financial services sector. But it does not stop with just sanction screening. Today, financial institutions must screen for PEP, criminal, and even negative news.

Aside from the risk of regulatory fines, credit unions must think about their reputation. Nothing will ruin a credit union’s reputation faster than being tied to a rogue member or an employee who has generated negative publicity. Where a financial crime was committed, the financial institution’s ties may be made public, creating a reputational crisis. The credit union may be deemed guilty by association, with members questioning the integrity of the credit union itself even if it has done nothing wrong.

For example, corruption among public employees, such as politicians, government officials and their associates is on the rise. As part of their customer due diligence obligations, banks and financial institutions must establish and report whether their clients are Politically Exposed Persons (PEP) and at risk of being involved in financial crimes, like money laundering, or are associated with a predicate offense as reported in the news.

A great KYC sanction screening solution for CDD begins with an exhaustive watchlists and negative news database. However, even the best compilation of data and news sources is useless without an intelligent search and scoring engine that works to minimize False Positives, while helping to ensure that True Positives are discovered.

KYC2020 SmartScan is the best in class sanction, PEP and negative news screening and scoring service that integrates automation, AI and NLP for big and small credit unions alike with flexible price plans to suite any budget.

SmartScan gives credit unions the smarts and sophistication of an enterprise sanction screening solution while avoiding all the cost and complexity. It is available as SaaS solution or OnPrem deployment. Plus, we have developed an extensive API Library for easy integration with in-house systems and workflows.

From Screening to Decisioning

Despite all the advances in technology, sanction screening still requires a significant amount of manual intervention that can dramatically slow down and disrupt the customer verification and on-boarding processes. There are generally four main hurdles to overcome:

1. False Positives. The best systems still yield 5-7% false positives that must be cleared manually by a compliance officer.
2. Record keeping. Compliance best practices require the storing and organizing of auditable documentation for minimum of 5 years. The administrative effort and resources needed to fulfill this requirement are high, costly, and can lead to expensive inaccuracies.
3. Long On-boarding Times. Sanction screening plagued by over-engineered systems, depends even more on manual interventions that are not only slower, but prone to mistakes and discrepancies. This results in a slow customer verification and on-boarding process.
4. Ongoing Monitoring. Constantly changing data means regular and recurring screening of customers. Depending on your risk-based approach, this could mean quarterly, weekly, or even daily screening. A poor screening system invariably leads to an inaccurate and ineffective batch monitoring program.

Traditional sanction screening solutions are designed to filter a set of watchlists. The search results are then manually exported for review. To stay relevant and competitive, credit unions must move from screening tools built around integrated manual workflows to stand-alone decisioning systems that automatically clear false positives to yield actionable screening decisions. All this in near real-time, with a human readable and audit friendly decision proof-of-work file, and without requiring manual effort.

Manual-centric AML compliance systems are by nature reactive. When processes are dependent on manually clearing a mountain of false positives and routinely tie up a large amount of resources, credit union leaders can feel like they are never in control.

On the other hand, a smart, automated sanction screening decisioning system can render 95% of all verification decisions automatically within a 60-second response time and a low decision error rate. For records that require manual screening, they can be sent within minutes to compliance officers, who should have all the info they need to take immediate action.

With DecisionIQ, we put credit union AML compliance teams back in the driver’s seat. We take a risk-based approach coupled with the best watchlist data and latest technologies in search, scoring, AI, NLP, and decision systems. Automated clearing dramatically speeds up on-boarding while reducing wasteful manual work. Each decision is accompanied by a rational proof-of-work file that is securely stored. All case management and AML officer reviews can be done electronically, and best of all, our highly intelligent monitoring system actively tracks watchlist data changes, automatically re-scans impacted customer records, and only send an alert when appropriate. This means no more manual redundant reprocessing of customer batch files in the name of ongoing monitoring!

No Need to Go it Alone

Credit unions do not have to figure out the best AML compliance system on their own, nor should they resort to requiring staff to multi-task between their regular roles and AML/CFT compliance efforts. Our qualified CAMS and VSkills certified specialists have experience working with credit unions and can help with a range of compliance needs, from revamping an AML system or tailoring our products to fit established workflows.

In Closing…

Smart data and automated decisioning promise to be a fundamental part of AML compliance among all financial institutions in the future. Credit unions, however, require smart AML compliance solutions that suit their unique structure, workflow, transactional needs and budget. Such systems are more than just a way for credit unions to stay AML compliant. They are necessary growth strategy that can keep them competitive in the years ahead.

Want to learn more about how KYC2020 solutions can help your financial institution? Contact us here or send us an email at sales@kyc2020.com.

KYC2020 is also not alone in the world of RegTech innovation. To find out more about other 2021 innovators, check out the RegTech100 list.

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Anti-money laundering (AML) compliance has always been a significant burden to credit unions. But as the new year gets underway, fulfilling the regulatory requirements against financial crime may be all the more daunting.

Over the past few years, consumers and a growing range of business clients have been seeking faster banking, more convenient access to their accounts and quicker funding decisions. But credit unions have been stuck treading water in the rising wave of new and existing financial regulations, while risks of default, fraud and other types of cybercrime continue to mount.

Historically, AML compliance and regulation did not apply to credit unions in the same way it has to larger banks and traditional financial institutions. However, as digital commerce goes mainstream among credit unions and they open the door to under-served, yet higher-risk businesses, recent changes to BSA/AML compliance have been shifting this dynamic.

Understanding the Challenges in Credit Union AML Compliance

In the first article of this series, we looked at the four critical pillars of AML/CFT compliance among credit unions. In this second article, we’ll now examine the five biggest obstacles that are standing in the way of an accurate and effective compliance program.

Balancing Accuracy and Speed

Regulatory authorities have been charging hefty fines to financial institutions that fail to meet all the compliance requirements of AML, KYC, and BSA. In fact in 2020 alone, financial institutions across the world have been penalized with a staggering $10.4 billion in fines and penalties.

The continual screening, monitoring, recording and reporting requirements is a resource-intensive business process for even the biggest financial institutions. Big banks, however, can afford to throw people and money at the process, and they can more easily absorb the financial “hiccups” along the way.

With smaller financial institutions there is a struggle to balance accuracy and speed while fulfilling ALM/CFT compliance regulations. Many credit unions still employ legacy systems that rely on a significant amount of manual activity and action.

Not only are these systems expensive to run, maintain and upgrade, but they are incredibly inefficient, too. The reliance on manual, repetitive procedures increases the chance of mistakes and omissions, and onerous reporting and auditing requirements frequently tie up employee time and attention. Moreover, senior leaders continue to invest significant time and money into cybersecurity and compliance rather than strategic initiatives and goals.

Making Informed, Smart Data-Driven Decisions

This leads us to a rather strange paradox: Many financial institutions already understand that in order to comply with anti-money laundering, fraud and data security regulations, they need the assistance of automated software. A number of credit unions have already done the research and plugged the best tools into their system. But instead of improving performance, their compliance efforts are impeded.

There are two main reasons for such an outcome. The first issue involves the synergy between automation, AI, and machine learning on one side with human decision-making, input and due diligence on the other side. Relying too heavily on manual operations opens the door to inefficiencies and inaccuracies. But, an over-reliance on the results of AML detection and risk assessment solutions, can lead to a disproportionate amount of false positives and negatives– the effects of which can be catastrophic for both the credit union and its members.

The second issue can be traced back to bad data. Global watchlist data, especially PEP, RCA, HIO, is unstructured, impractical and “ugly.” Though it’s a real challenge to aggregate and standardize, it is mis-information to think that it’s a “big data” problem. The race to bigger databases leads to lack of quality in the data itself. Credit unions would be wise to start with quality data such as VisionIQ Global Watchlist Database where the data philosophy is compliant, comprehensive, and smart versus big, getting bigger, and becoming dirtier.

For these reasons, it’s not uncommon for an AML system to generate a high proportion of false positives. We’re talking about 80 to 90 percent of alerts. If a credit union blindly acts on a suspicious activity alert and files a SAR on a client, yet the client’s transaction activity was actually legitimate, it can lead the financial institution down a rather destructive path.

The member client will now become subject to frequent review. Each review will scrutinize the customer’s financial activity. If the suspected suspicious activity happens again, the credit union could decide to close all associated accounts. Multiple SARs could also attract the interest of law enforcement and eventually lead to an investigation. An initial query by internal AML investigators can easily de-risk a client who is making legitimate transactions and save a tremendous amount of time, money and headache.

On the other hand, if credit unions are not diligent enough in monitoring transactional activity and paying attention to other red flags, they become complicit with the illegal activities of the clients in their watch. Many compliance and risk assessment monitoring systems are equipped to mitigate risk on behalf of the financial institution. Credit union leaders would do well to keep in mind that although these solutions are getting better with time, the techniques and strategies criminals are using to cover up fraudulent behavior are, too.

Working with MSBs and “High-Risk” Entities

With increasing regulatory scrutiny on large financial institutions, many high-risk clients, such as money services businesses (MSBs) and marijuana-related companies, are turning to credit unions for their banking needs.

Some of these high-risk organizations may indeed be involved in money laundering and other financial crimes. Small institutions are preferred targets for such operations since they tend to have less regulatory oversight and compliance processes in place.

Consider, for example, a large MSB. A money services client can generate significant transaction volumes that could overwhelm a small credit union. Yet to ensure compliance with the KYC and BSA regulations, a credit union must continue to assess the risks posed by this client, closely monitor activity, report any unusual behavior, and implement a range of added controls to manage any exposure to risk. This includes continuously monitoring media for relevant negative news on their customers and members.

Such AML compliance measures may often be at odds with providing a good customer experience to high-risk credit union members, but are necessary. Fast, sophisticated, affordable, and low-friction regulation technology solutions can be a boon to help balance both goals. For example, as it relates to negative news screening, our Adverse Media Check ®, relies on AI, Machine Learning, and Natural Language Processing to continuously monitor thousands of relevant global news sources to create a persona database of individuals, companies, and politically exposed persons (PEPs) for relevant negative news. But we don’t stop there, the results are then fed into a AI-based decisioning system to clear false positives and identify risk. More about this and other market solutions in our final article in this series.

Mitigating Data Security Threats

As incidents of cyberattacks continue to evolve and grow, small and mid-sized credit unions face a greater threat in a sense than the largest enterprises due to their tighter budgets and access to fewer resources. Compromised customer data typically leads to fraud, stolen identities, and more. Solving for AML compliance should not be at a cost of compromising customer data.

Only sustainable data security best practices will help credit unions stay BSA/AML compliant while keeping their data and networks safe. Specifically, credit unions must now have controls in place to protect the security and confidentiality of member records, respond to and report security breaches in a timely manner, and maintain vital data helpful in identifying the source of cyber criminal behavior.

Maintaining a Positive Customer Experience

Customer expectations for fast, seamless banking create two competing priorities for financial institutions: staying AML compliant and keeping customers happy. Slow on-boarding, false positives, and cyberattacks will certainly compromise that experience.

Credit unions are known for their customer service towards members and it is a big reason why clients would choose to bank there. According to a recent PwC report, speed, convenience, helpful employees and friendly service is important for more than 70% of banking consumers, and positive customer experiences influence 75% of customer decisions in banking. Satisfied credit union members are loyal customers who will increase the scope of their relationship and recommend their credit union to others.

In short, AML/CFT compliance has always been a complicated, resource-intensive process for credit unions, and all signs indicate that it will only get more challenging in the years ahead. But, credit unions don’t have to go through this process alone. A number of regulation technology innovators can help credit unions stay compliant, even with evolving threats, while maintaining the level of quality service they are known for. At KYC2020, we have a history of working within the credit union space. We understand the unique challenges credit unions face on a daily basis and offer local solutions.

In the last article of our AML for credit unions series, we’ll examine some of the many solutions that are giving credit unions the technological edge they need to both stay compliant and expand their operations.

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Banks must check the identity of their clients at the time of onboarding.  In other words, they must make sure that clients are genuine.  They must also identify the risk they represent as clients to the banking system.  Different types of clients come with different levels of risk. The level of risk determines the frequency of ongoing monitoring and transactional screening that must be conducted throughout the client relationship. 

Lets take a look at high risk clients, and how to identify them.

Sanctioned Persons and Entities

These are the individuals, companies, and organizations that are persona non grata.  They are prohibited counter-parties. You should not be doing business with them.  Depending on your jurisdiction, dealing with them can incur severe penalties.  

Most government bodies and regulatory authorities publish these lists.  These are generally knows as sanction lists.  Sanction lists are regularly updated and you must continually screen your customers against these lists as part of your KYC process. 

PEP’s

Politically Exposed Persons usually have a high profile political role or serve in public office. They may be at increased risk of involvement in money laundering or even terrorist financing based on their position. 

Companies looking to do business with PEP’s need to disclose this and continuously monitor their transactions to ensure they are compliant and not engaging in nefarious activities.

Who can fall into this category?

Here is a list people can make the PEP list.

• Government officials, Presidents, Prime Ministers, and even cabinet members of countries.
• The second tiers are the officials of the ruling parties and their opposition parties.
• Any senior executives and board members of government-controlled entities. Any relatives or close associates of any of the people mentioned above.

Often, nepotism is the easiest way to move government funds to relatives. While employing family members into positions of power may buy loyalty, these appointments often lack the required auditing when going through procurement or tender processes.

Criminal Organizations

Money laundering happens through seemingly legitimate companies. Directors or owners can often be persons of interest who hide criminal activity behind the legitimate business. Your company must do regular screenings of customers against global watchlists and negative news as part of your KYC checks. This will ensure your company remains alert to any underhanded activities that could be funding crime.

Financial Institutions should report any activity identified as possible money laundering or criminal funding activities and will freeze customer accounts until investigations are complete.

Terrorist Activities

Governments release sanction lists that include terrorist activities. Financial Institutions use the lists for sanction screening of individuals, companies, and organizations as part of their KYC process. There are almost daily updates on the targeted financial sanctions lists. They are critical to limit criminal funds’ movement to terrorist organizations to help them fund arms deals and terrorist activities.

Transaction monitoring and ongoing sanction screening of new or existing customers is a minimum requirement for any KYC process. The frequency of ongoing monitoring will depend on the AML risk profile and the risk-based approach of the company.

Reduce the risk of non-compliance

Thanks to regulation technology (RegTech), quality and affordable solutions for KYC check and AML compliance are available to your company. For large financial institutions or small non-financial firms, ensure you stay on the right side of the law. Proper compliance reduces the risk of fines and warnings. Non-compliance, especially as it relates to sanctions screening for KYC, can be costly – not to mention the long-lasting reputational damage for your business.

KYC2020 is one of the world’s 100 most innovative regulation technology solution providers as ranked by RegTech Analyst. For a demo or appointment with KYC2020, please click here.

For SME’s, credit unions, and Fintech companies, finding efficient and affordable solutions had been out of reach… until now.  RegTech innovators are taking advantage of AI, ML (machine learning), and NLP (natural language processing) to deliver compliant screening solutions that are fast, affordable, and low friction for smaller businesses.

The False Positives Challenge

There are a few factors that slow down the timing of approvals during screening. A main one is the volume of false positives exposed. This is a nightmare for companies looking to improve their customer acquisition. They win customers by advertising faster approvals in opening accounts and managing transactions.

When the volume of false positives spirals out of control, unexpected delays extend from a few days to weeks. Moreover, delays in customer onboarding and transaction processing do not just cause frustration for the customer but also for the company.

Online customers are not sticky, and according to a study done by Forbes, customer experience is perhaps the biggest reason why customers switch vendors.

Machine learning and AI

With AI and machine learning becoming an essential part of the compliance world. Companies can now manage the volume of false positives with autonomous clearing of alerts. AI based decision systems use a rule-based approach and built-in learning models to filter out the data.

Once the AI learns of a particular alert that is cleared manually, it will learn the behavior and create new rules to clear false positives automatically.

Decision systems for automated clearing of false positives can be a business savior. However, replacing human intelligence with artificial intelligence does not come without risks. You need to follow best practices to avoid auditor scrutiny and avoid penalties for non-compliance.

For example, one of the system’s most important features is that it must be auditable and provide transparent proof of decision that is easy to read and track. For more on best practices for AI-based decision systems, download this whitepaper from KYC2020.

An ongoing process

Ongoing monitoring of customers is a requirement for most AML compliance regimes since databases and sanction lists update almost daily.

Algorithms are always learning new alerts and rules. Manual processes are no match against AI-based systems for ongoing monitoring of customer lists. Development of AI, Machine Learning (ML), and Natural Language Processing (NLP) in AML compliance applications reduces the need for human reviews of false positives. This seemingly simple addition shortens the time required to get approvals.

Win-Win-Win

The best outcome for smaller companies is to move towards a tech-based compliance approach for their customers. This will help reduce the possibilities of fines for non-compliance and make it cost-effective for companies to carry out compliance.

KYC2020 provides affordable and effective AML compliance solutions that take advantage of latest technologies. KYC2020 is the best in class source for global Sanction, PEP, HIO, and Adverse Media data. We have designed our AI and NLP based screening and ongoing monitoring solutions to eliminate false positives and reduce manual work.

Contact Us for a free trial or to learn more about why KYC2020 is recognized as one of the world’s most innovative regulation technology solution providers by RegTech Analyst.

The anti-money laundering regulations and controls are in place to identify these activities and alert financial institutions. Reporting red-flags is critical to preventing and reducing these criminal activities, and ultimately stop the source of funds for criminals.

Criminals use “layering” to hide their funds. They move money in-between accounts and companies. The more layers, the harder it is for the crime divisions to track the source of funds.

Layering allows the criminal to remove themselves from the source, and each transaction helps add another layer of the legitimacy to the funds.

Placement of the funds

The first step in the layering process is called “placement.” This happens after the criminals have illegally acquired the funds from their activities. The most common way criminals do this is by moving money through a legitimate business often owned by the criminals or their families. This initial funneling of funds usually occurs through cash-heavy operations and companies like casinos.

The aim is to manage large volumes of smaller transactions that do not trigger deposit alerts at the banks. These reporting thresholds are common knowledge, and the criminals ensure that their transactions are always below these threshold alerts.

Moving money from these companies to suppliers and other criminal associates via false invoices and payments is standard practice.

This first layer of money laundering is only the beginning. Criminals add many more layers to reduce traceable funds.

How to identify money laundering activity

 Reg flags for layering by criminal organizations include:

• Large cash deposits into a variety of bank accounts
• Making international transfers in and out of offshore accounts
• Investing in and reselling high-value items like jewelry or art
• Purchasing property and real estate
• Investing in companies and legitimate businesses
• Using shell companies to move money in and out of accounts
• Multiple transactions via different banks and financial institutions

Banks, FIs, and even many non-financial firms such as charities, universities, MSBs, and even real-estate brokers, are regulated entities and must report suspicious activity (SAR) that indicates money laundering.  Banks are required to have transaction monitoring systems in place to monitor and alert for suspicious activity.  Additional suspicious activities include:

• Prominent transactions: Cash deposits into an account and immediately withdrawn.
• Regular transactions and deposits that are exact amounts or add up to an identical amount will raise a flag as layering.
• Transactions from high-risk countries can also trigger an alert.

With the use of services offered by AML Compliance companies like KYC2020, you can get to know your customer and identify business risks related to money-laundering and financial crime.

KYC2020 provides affordable and effective AML compliance solutions. Our comprehensive databases offer the best global sanction, PEP, HIO, and criminal watchlist data. We offer AI-based sanction screening and adverse media monitoring solutions to complement our data. KYC2020 is recognized as one of the world’s most innovative regulation technology solution providers by RegTech Analyst.

For a consultation or to book a demo, please click here.

Over the past few years complying with anti-money laundering (AML) regulation has become increasingly difficult for many credit unions in the United States and Canada. With the rapid expansion of new technologies, industries, business models and cross-border transactions, regulators have ramped up their AML compliance demands.

While big banks have their own AML departments and are investing big bucks in their digital infrastructure, smaller credit unions generally lack the funds and other resources to keep up with it all. This shortfall in turn becomes a major impediment to complying with AML/CFT regulations.

In this three-part series we are going to take a closer look at AML/CFT compliance among credit unions. Specifically, we’ll examine the current cost of not being able to comply, some new compliance challenges and threats, the most essential elements that today’s credit union AML/CFT compliance programs need to have, and the easiest, most cost-effective solutions to actualize such changes.

The High Cost of AML/CFT Compliance

In a recent survey by CU Service Network of over 60 executives from credit unions ranging in size from $30M to $1.6B in total assets, a whopping 98% identified compliance as being their primary operational concern.

It’s not hard to see why. According to another study, this time from the Government Accountability Office (GAO), US credit unions spent up to 2.4% of their total 2018 operating expenses on AML/BSA compliance.

For smaller credit unions that percentage is likely higher since they do not have the same economies of scale or investment in IT infrastructure that bigger credit unions enjoy.

Yet, these numbers still don’t accurately reflect the true cost of compliance among credit unions.

At KYC2020, we offer consulting services to our clients to help them develop and employ a customized AML compliance program. During the risk assessment and workflow analysis, we will consider numerous indirect costs that may increase risk while reducing efficiency. For example:

• When first-line staff are tasked with duties related to regulation, reporting and record-keeping requirements that add to their regular responsibilities. This takes them away from their regular jobs and makes them less efficient.

• When compliance programs rely heavily on manual and repetitive procedures. This increases the chance of errors and omissions. Even small errors, such as incorrectly labeling a document, can lead to fines and costly downtime.

• When the credit union’s senior leaders are pouring majority of their time and money into cybersecurity and compliance rather than strategic initiatives and goals. This lack of strategic focus can lead to missed opportunities.

On the other hand, when credit unions are unable to prevent fraud and money laundering activities, they will inevitably suffer from declining revenues, lack of customer satisfaction, debilitating fines, and damage to their reputation.

It doesn’t have to be this way! There are proven methods for credit unions to get back all the wasted time and money.

The most successful credit union leaders are those who seek to understand the role that effective compliance management plays in the institution’s overall strategy. They make an effort to consider the impact of compliance on operations as well as customer acquisition and retention. Finally, they recognize their unique needs and circumstances and then implement the most appropriate tools to help them optimize their compliance activity.

By doing so, these leaders will be best positioned to help their credit unions grow and prosper, now and in the future.

Rethinking Credit Union AML Compliance

As the financial services industry continues to evolve and expand and new compliance rules emerge, many credit unions have been content to simply make tweaks to their current compliance programs, policies and procedures. This only leads to greater inefficiencies over time.

Instead, senior leaders need to completely rethink how compliance happens along four key verticals:

1. Conducting an Audit and Risk Assessment

Risk assessment is a pillar of AML compliance and generally is a crucial first step in building an effective AML/CFT program. Yet, many senior management teams get derailed when they try to rubber stamp a solution or a mix of solutions on to their legacy systems.

The problem with this is that there is no one-size-fits-all solution to fulfilling compliance requirements. While each financial institution must fulfill certain legal obligations, it is essential that the program be tailored to their unique needs in addition to the identified risks and vulnerabilities of their clients and third party suppliers

In practice, this means that an AML/CFT program must take into account factors related to their product and service offerings, their size and geographic location of the branches, the business activities, and knowledge of its customers activities.

Finally, another often overlooked factor is the ability to scale and adapt as the credit union matures and grows. A credit union’s AML/CFT program should have the built-in flexibility to adapt to changes in compliance requirements, technology, and its target market while maintaining strict data security and information management controls.

2. Establishing Internal Controls

A credit union’s compliance obligations include not only federal and state laws, but also the expectations of regional, and at times, international regulators. For example, the General Data Protection Regulation (GDPR), which requires businesses to protect the personal data and privacy of European Union citizens, could apply to a credit union with members from multi-national businesses.

Few credit union leaders would fail to acknowledge that their AML/CFT compliance program should focus on internal controls and systems to detect and report financial crime. But at the same time, several other items should be taken into consideration based on the modern realities of AML/CFT programs today. These include:

• The increasing number of mobile payments that significantly reduce financial transaction times.

• The impact of customer experience and expectations on revenues and customer retention. A recent study conducted by Forrester, revealed that customer experience is the most highly valued quality consumers are looking for in a financial institution. Many studies show the same results for business customers too.

• Cybersecurity and financial fraud have grown in scope and complexity in recent years. Fraudulent activity is getting increasingly more difficult to recognize and contain. When suspicious activity is identified, the response needs to be data-driven, intuitive, and happen in real-time.

3. Providing Continual Employee Training and Education

AML/CFT compliance always extends to a credit union’s employees. In fact, employees tend to be the weakest link in data security and compliance procedures. Staff members need to be aware of their roles and responsibilities within the system. They should know how to conduct due diligence and navigate the various organizational policies and procedures that help to ensure on-going compliance.

But given that compliance should be a dynamic system, employee compliance training and the communication of new systematic threats must also be dynamic and dealt with swiftly before becoming too much to bear.

4. Monitoring the Results

Although AML/CFT compliance programs require and independent review, the credit union should also involve a regular internal review of compliance controls in order to measure their effectiveness not just in meeting compliance standards but in achieving strategic business goals. Identifying the institution’s strategic goals while focusing on compliance is a core competency that will drive success among today’s credit unions.

In short, today’s credit unions are in need of dynamic and customized AML/CFT compliance programs. Achieving such a goal is actually easier and more cost-effective than it seems given the rise in regulation technology (RegTech) and vendor based compliance solutions.

Before we can take a look at these vendor based solutions, we need a deeper understanding of the challenges credit unions are currently facing when it comes to AML/CFT compliance.

We’ll discuss that in part two of this series.

About the Author

KYC2020 is a Chicago-based global regulation technology company.  KYC2020’s team of CAMS certified AML specialists have combined next-generation technology with their deep understanding of Banks, MSBs, Credit Unions, and Cryptocurrency operations to deliver compliant AML solutions that are low friction and cost effective. KYC2020 is recognized as one of the world’s most innovative regulation technology solution providers by RegTech Analyst magazine.  To learn more about the author, visit www.kyc2020.com