The Future of Technology in Customer Identification & Relationship Risk
Thomson Reuters Accelus, pp. 1-13, November 2013
13 Pages Posted: 3 May 2014
Date Written: 2013
This paper examines the technological challenges faced by financial institutions in setting up, managing and maintaining an effective Know Your Customer (KYC), Customer Due Diligence (CDD) and Customer Identification Program (CIP); as well as the future of money laundering and terrorist financing risk management with a focus on technologies.
Knowing a customer well helps a financial institution to manage their risks and meet regulatory requirements. However, it is one of the major challenges faced by financial institutions every day. Despite increased investment in AML/CTF systems, the systems in place by many financial institutions fall well below the standard necessary to deal with current or future regulatory demands placed on the industry. This paper discuss the challenges faced by financial institutions and how cloud computing and big data analytics may help financial institutions to better position themselves to more effectively deal with vast amounts of data and their ever-changing regulatory environment.
This paper also discusses a three-pronged approach which may be used to ensure the effective use of up-to-date intelligence, make careful predictions about future trends in information and communication technology (ICT) and the scale of money laundering and terrorism financing risk landscape and ensure that appropriate controls are in place to ensure the resilience of AML/CTF strategy.
Keywords: Anti-Money Laundering, Counter Terrorism Financing (AML/CTF), Know Your Customer (KYC), Customer Due Diligence (CDD), Customer Identification Program (CIP)
JEL Classification: C88, C89, K42, K49
Suggested Citation: Suggested Citation