Since 2020, we have met weekly with legal professionals from all over the UK to discuss a variety of hot topics, issues and upcoming trends. We run the event under the Chatham House Rules and it is a safe space for professionals to discuss issues with our peers and keep up to date with ever-changing legislation.
On a recent call, we invited Martin Pashley to lead the discussion on KYC (Know Your Customer.) Martin has many years of experience in the world of KYC and has seen how the regulations have developed over the years along with the technology to support them. He has been involved in a range of global identity verification, KYC/KYB, fraud prevention and anti-money laundering industry projects. Martin led the way with some of the initial introductions of electronic ID verification systems.
There was much discussion about how firms conduct checks and there were some differences in where some saw greater risks. The key points we took away were:
· Adverse media checks are an important part of AML checks but managing false positives can be time-consuming. Learning Google Boolean searches are worthwhile but remember that only 32 keywords are considered by Google. Do not be like the bank that has an overly sophisticated search functionality with many of the terms being ignored!
· When is a PEP not a PEP (Politically Exposed Person) - Do you know what criteria your system provider uses? Criteria differ, so for example, a provider may only consider current ministers to be PEP’s whereas others will factor in ex-government, ex-senior police, etc.
· It is advisable to read the Joint Money Laundering Steering Group Guide (JMLSG) (https://www.jmlsg.org.uk/guidance/current-guidance/) - There are likely to be good ideas for you to include in your own approach.
Thanks to Martin for an interesting discussion on AML and for providing some useful ideas on how to develop your AML programme.