Treasury in Practice Guides
Navigating KYC Compliance
Underwritten by Kyriba
Companies sit at the heart of multiple networks, engaging with different partners, customers and suppliers for a range of activities, all central to the business. And, because these all involve some form of financial transaction, each party to each transaction has to know who it is doing business with.
Three factors in particular have led to a growth in know your customer (KYC) requirements on companies, whether in response to bank requests or to verify the identities of suppliers and customers.
First, the switch from paper-based payments to electronic payments has shortened settlement cycles, making it more important than ever for organizations to know the identity of their counterparties.
Second, governments have become more concerned with taking steps to prevent the laundering of the proceeds of crime, which has placed a greater onus on organizations to be able to demonstrate that they know who they are doing business with.
Finally, an increase in the various forms of cyber risk has incentivized companies to gain greater visibility of their partners along the financial supply chain. This guide outlines the two sides of the constant KYC process, identifies the key areas of concern to be managed, and provides some tools to help treasurers make what is generally a cumbersome process more efficient.
Key tips and tricks offered in this guide include:
• Understanding each of your banks’ requirements; they are likely different
• Verifying the identity of customers - and suppliers
• Tracking all compliance requests
• Leveraging software to enable standardized and repeatable processes
• Integrating sanctions list screening into your payment processes
• Digitizing your payments workflows
• Ensuring processes are fully auditable