News & Blog

The Future of KYC Compliance — Insights From Miriam Goldman Epstein

Future of Compliance
January 6, 2021


This article is part of Kyckr’s new Future of KYC Compliance series, which interviews leading industry professionals and thought leaders to learn more about the trends that will shape the future of KYC compliance.

The following is an interview we recently had with Miriam Goldman Epstein, Operations Manager, SQOPE S.A

What’s the current state of KYC compliance?

ME: KYC compliance is in a constant state of growth and evolution due to various factors. Some has to do with public awareness of corruption and poor oversight from financial institutions - much of which resulted from the exposure of major scandals through high profile leaks. This has forced governments to act, including by imposing stricter regulations, clearer definitions, and greater transparency. As a result, there is ever increasing demand for compliance solutions, such as enhanced due diligence, especially for individuals from complex and opaque jurisdictions.

How has KYC compliance evolved over the past 5 years?

ME: For this, we can look at the trend with anti-money laundering directives in the EU. The first (1AMLD) was agreed upon in 1991, with three more over the next 14 years. Meanwhile, 4AMLD, 5AMLD, and 6AMLD were all created within the past 5 years. This really highlights an increased pace in regulation. It’s also important to note that the EU has actually been enforcing these regulations more stringently than in the past with heavy fines.

In addition, there has been growing recognition in the industry that standard watch-list and database checks are insufficient to protect the financial institutions and that financial professionals need to invest in strong compliance policies to protect their reputation and ensure proper due diligence.

How has KYC compliance changed in the midst of COVID?

ME: COVID-19 really impacted the onboarding process for the financial industry particularly given restrictions on in-person meetings. Likewise, KYC and due diligence research faced challenges linked to the inability to visit physical locations to obtain records, alongside technical challenges connected to data protection and privacy that arose from increasing remote work. All the while, regulators continued to issue fines to those who were not compliant and leeway wasn’t granted. Such logistical challenges led to backlogs, delays, and other issues for compliance professionals. From there, we saw a growing demand for outsourcing of research to third-party providers.

What are the top trends shaping the future of KYC compliance?

ME: Over the coming years, I believe that transparency demands from the public will continue to shape government policies, with even some of the more opaque jurisdictions required to provide more information, such as ultimate beneficial ownership details.

In line with this, we see that there are more calls and policies being drafted to impose greater KYC regulations on other industries, such as the art market and real estate, as well as other forms of currency, such as crypto.

Finally, we notice that there are more technological solutions being developed to assist compliance professionals in their research.

What’s the future of KYC compliance?

ME: The future of KYC compliance will be shaped by trends described earlier. We expect the market demand to grow in size and in the level of reporting expected. Reputational issues will be an expected feature of any good KYC report, as will enhanced coverage of an individual’s source of wealth.

To this end, we expect that what is today considered deep due diligence will, in the future, be the standard level of reporting as financial professionals will adjust to the need for more in-depth coverage of all risks associated with a given individual or entity.

In summary, we expect that the future of KYC compliance will be increased accountability vis-à-vis whom we enter into business.

Future of Compliance
January 6, 2021


This article is part of Kyckr’s new Future of KYC Compliance series, which interviews leading industry professionals and thought leaders to learn more about the trends that will shape the future of KYC compliance.

The following is an interview we recently had with Miriam Goldman Epstein, Operations Manager, SQOPE S.A

What’s the current state of KYC compliance?

ME: KYC compliance is in a constant state of growth and evolution due to various factors. Some has to do with public awareness of corruption and poor oversight from financial institutions - much of which resulted from the exposure of major scandals through high profile leaks. This has forced governments to act, including by imposing stricter regulations, clearer definitions, and greater transparency. As a result, there is ever increasing demand for compliance solutions, such as enhanced due diligence, especially for individuals from complex and opaque jurisdictions.

How has KYC compliance evolved over the past 5 years?

ME: For this, we can look at the trend with anti-money laundering directives in the EU. The first (1AMLD) was agreed upon in 1991, with three more over the next 14 years. Meanwhile, 4AMLD, 5AMLD, and 6AMLD were all created within the past 5 years. This really highlights an increased pace in regulation. It’s also important to note that the EU has actually been enforcing these regulations more stringently than in the past with heavy fines.

In addition, there has been growing recognition in the industry that standard watch-list and database checks are insufficient to protect the financial institutions and that financial professionals need to invest in strong compliance policies to protect their reputation and ensure proper due diligence.

How has KYC compliance changed in the midst of COVID?

ME: COVID-19 really impacted the onboarding process for the financial industry particularly given restrictions on in-person meetings. Likewise, KYC and due diligence research faced challenges linked to the inability to visit physical locations to obtain records, alongside technical challenges connected to data protection and privacy that arose from increasing remote work. All the while, regulators continued to issue fines to those who were not compliant and leeway wasn’t granted. Such logistical challenges led to backlogs, delays, and other issues for compliance professionals. From there, we saw a growing demand for outsourcing of research to third-party providers.

What are the top trends shaping the future of KYC compliance?

ME: Over the coming years, I believe that transparency demands from the public will continue to shape government policies, with even some of the more opaque jurisdictions required to provide more information, such as ultimate beneficial ownership details.

In line with this, we see that there are more calls and policies being drafted to impose greater KYC regulations on other industries, such as the art market and real estate, as well as other forms of currency, such as crypto.

Finally, we notice that there are more technological solutions being developed to assist compliance professionals in their research.

What’s the future of KYC compliance?

ME: The future of KYC compliance will be shaped by trends described earlier. We expect the market demand to grow in size and in the level of reporting expected. Reputational issues will be an expected feature of any good KYC report, as will enhanced coverage of an individual’s source of wealth.

To this end, we expect that what is today considered deep due diligence will, in the future, be the standard level of reporting as financial professionals will adjust to the need for more in-depth coverage of all risks associated with a given individual or entity.

In summary, we expect that the future of KYC compliance will be increased accountability vis-à-vis whom we enter into business.

Build your Customer Due Diligence and KYC processes on a robust foundation with Kyckr.

Make data work smarter, not harder.

Request a Demo
Newsletter Sign Up
Book a Demo
Talk to us
LinkedIninfo@kyckr.com
Close
23Q3_ALL_WEB_23.02_Signup_FORM
23Q2_ALL_WEB_14.12_KYC_VS_KYB_Webinar_Replay_FORM
23Q2_ALL_CONF_07.12_AFCSummit_BookAMeeting
23Q2_ALL_WEB_14.12_KYC_VS_KYB_SIGNUP_FORM
Webinar: Spotlight on KYC vs KYB - Why The Difference Is Increasingly Important For Verification
23Q2_ALL_WEB_17.11_Corporate_KYC_Landscape_ReplayRequest
23Q2_ALL_WEB_27.10_Corporate_KYC_Landscape_FINAL_FORM
Whitepaper: AML Bank Fines 2022 Mid-Year Report
Research Paper: The State of Customer Onboarding in Corporate Banking in Australia 2022
Registry Portal Pro
Registry Portal Basic
Registry Portal Essentials
Request API Key
Newsletter Signup
Whitepaper: AML Fines Report 2021
Ebook: The Future Of Financial Crime
Research Paper: Voice of the KYC Compliance Professional
Whitepaper: Corporate Onboarding: will it become a competitive differentiator for banks in a real-time world?
Research Paper: The State of Customer Onboarding in Corporate Banking
Whitepaper: Overcoming the Limitations of Company Registries to Enhance KYC Efficiency
Whitepaper: AML Bank Fines 2020 Report
Whitepaper: Impact of the European Union’s 5th AML Directive
Leverage cutting edge technology to automate customer onboarding
Moving from Periodic to Perpetual KYC
Unleash the power of primary source data & automate customer onboarding
Primary source data, the true foundation of regulatory compliance for Legal Firms
Primary-source data, the backbone of streamlined, “zero-touch” onboarding for Payment Providers
Spotlight on company registries in the wake of the FinCen Papers
Spotlight on US Company Registries
Spotlight on Ultimate Beneficial Ownership
Spotlight on APAC Company Registries
Spotlight on Company Registries in Offshore Jurisdictions
How can automation enhance your KYC and Onboarding Process?
Perpetual KYC – a myth or a must?
Spotlight on 2021 AML Fines
How to Future-Proof your AML/KYC processes with the help of RegTechs?
Webinar Replay: How to overcome the challenges associated with UBOs?
Spotlight On Entry Verification
Registry Portal Enterprise
AMLFines_ReplayRequest_FORM
Replay
Webinar Replay
Book A Demo