Meeting new expectations

Foundational considerations when upgrading Know Your Customer programs

Banks are expected to demonstrate that they understand their customer base and have considered the associated risk of their customers. To help financial institutions of all sizes think about how they might enhance and transform their Know Your Customer (KYC) programs, the Deloitte Center for Financial Services presents Meeting new expectations: Foundational considerations when upgrading Know Your Customer programs.

This report identifies and explores seven dimensions that can help create a more effective and efficient KYC program:

  1. Policy: The foundation of the KYC program that defines what the objectives are
  2. Procedures: Instructions for all KYC processes that define how the objectives are met, e.g., customer identification and verification, customer due diligence, and enhanced due diligence
  3. Data standards: The governing principles for collecting, storing, and analyzing data
  4. Technology and automation: The integrated technology ecosystem needed to develop and sustain an effective and efficient KYC program and to help identify higher-risk customers
  5. Customer risk scoring: The quantified risk-based assessment of each customer
  6. Operational support: Techniques to centralize certain essential KYC activities to apply greater expertise while driving improved efficiency
  7. Organizational culture: The appreciation of and support for KYC as a valuable compliance and risk management activity

Together, all seven dimensions can help to mitigate money laundering risks across the institution.  

Meeting new expectations
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