Since the 5th Anti-Money Laundering Directive came into force in Jan 2020, having accurate and up-to-date information on corporate customers has never been more important. This is also typically one of the most challenging areas for regulated firms to quickly update and obtain all the necessary evidence as part of the ongoing KYC review.
It’s time to make an important decision that could affect your company’s future.
You have two options: real-time data from a primary source or outdated stored data of uncertain origin. Which one do you choose?
The first choice is obviously superior. Primary source data provides companies with accurate and legally reliable information taken directly from the source, while stored data as the label says have been stored for an unknown period of time, which means outdated.
For data to be usable, the following questions need to be considered: Can I see the source of the data? Can I trust the source of the data? How up-to-date is the data? How am I notified when a change occurs?
Skip the headache and the questions. Primary source data makes it easy for companies to get accurate, verifiable information which you can make informed decisions on. Among strict regulations, fraudsters, and the need for fraction-free client onboarding, providers of cached and stored data simply cannot meet the needs of today’s businesses.
Trustworthy data works better
Research shows that 64.4% of firms either experience difficulties with their data or cannot verify its quality. A survey conducted in 2017 by Thomson Reuters found that only 23% of AML leaders at financial institutions expressed the top level of confidence in their AML and customer due diligence (CDD) data vendors. Participants in the study named coverage gaps in different regions as a leading cause for concern.
The top level of confidence may sound like a high bar, but why settle for less? Stored data is outdated by nature and too unreliable to use in making informed KYC decisions. You don’t know when the last update occurred or what the risks could be. Maintaining a database of stored information usually means maintaining millions of records, and because the records change continually, the task never ends. This gets even more difficult across country borders.
At Kyckr, we do not store data. We access corporate registries in real-time with every search, facilitating access to primary sources , providing our customers with the most updated, legally authoritative information possible.
Why stored versus primary source data matters to you
We talk to people all the time who believe their data comes from primary sources, when in reality, their data was stored or cached before they accessed it. Even if information comes from the same source, it’s not primary source unless the information received matches the information that exists within the primary source at the time of access.
In compliance context, the less reliable the data, the higher the risk. These risks are live and ever-evolving. Bad actors attempt to breach regulations or take advantage of holes in processes, while regulators look for areas of non-compliance. In both cases, outdated information can create unnecessary vulnerabilities, whereas primary source data collected in real-time provides accurate information that you can act on immediately.
Ongoing compliance requires ongoing vigilance. Only primary source intelligence can deliver what businesses need today. Kyckr has been a leader in providing real time access to primary source data for more than 10 years, and we are excited to help more companies realise the benefits and peace of mind that come with superior KYC compliance.