White Paper on KYC — Enhanced Due-Diligence

Jagannathan Vasudevan, CAMS Audit

The cornerstone of a strong Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program includes comprehensive customer due diligence (CDD) policies, procedures and processes for all customers combined with the adoption and implementation of internal controls. The requirement that a financial institution (FI) know its customers, and the risks presented by its customers, is basic and fundamental to the development and implementation of an effective BSA/AML compliance program.

With respect to accounts that have been identified by an institution’s CDD procedures as posing a heightened risk, these accounts should be subjected to enhanced due diligence (EDD) that is reasonably designed to enable compliance with the requirements of the BSA. In essence, a FI’s CDD processes should commensurate with its BSA/AML risk, with particular focus on high-risk customers.

This paper will focus on enhanced due-diligence (EDD), sanctions, screening, risk scoring and highlighting the benefits of a global approach to CDD (Global KYC) for a U.S.-based FI/Bank operating across geographies with diversified lines of businesses.

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