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KYC for Banks & Risk-Based Approach

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?.

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KYC for Banks & Risk-Based Approach

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  1. KYC for Banks & Risk-Based Approach Presented by: Ali Al-Qahtani Head of Anti Money Laundering March 2010

  2. 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

  3. 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 --

  4. Identify, mitigate and manage the money laundering and terrorist financing risk. Appropritae controls & systems Ongoing monitoring of customer profile & activities What is a Risk-Based Approach?

  5. 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. Why is a Risk-Based Approach?

  6. Four main components need to be taking into consideration: KYC & CDD Monitoring of customer & account activities Reporting of suspicious activities Training & awareness How to Establish a Risk-Based Approach?

  7. Risk Based Approach Model Customer Profiling KYC & CDD High Risk Individuals PEP’s PBK Charities Corr. Banks Corporate Legal Entity, Nationality ,Occupation ,Income Monitoring Customer Activities Cash Deposit Transactions Profiling Transfer Utility Bills Branch, ATM, Tele-Banking, Internet Banking Channels Local Remittance International Reporting Suspicious Activities (SAR’s) POS Credit Card Products & Services Internet LC/LG Trade Services FX/MM/SAWPS Treasury Training & Awareness

  8. Thank you for your time & attention

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