Today most of the services are provided online. It has created a number of new concepts and terms in the areas we are familiar with. The financial environment was no exception. So, speaking about the security of financial transactions in general, it is impossible to ignore KYC (Know Your Customer) and AML (Anti-Money Laundering). Many people think that these terms are identical, but this is not entirely true. Romans Nekrutenko, CEO of the fintech company Hawex explains to us how KYC and AML differ by the example of the procedures carried out in his company.
AML as a concept for countering financial crimes in Hawex
AML and KYC are the first things to mention when checking the company’s activities and estimating the fight against financial crimes. Hawex, like many, has its own AML policy – a set of rules and measures that identify unreliable financial transactions and reduce the likelihood of legalizing illegal funds. KYC, as part of these measures, implies that the company establishes and confirms the identity of the client. Thus, KYC is part of the AML complex, but these concepts cannot be used interchangeably.
Hawex AML policy is based on a list of regulations and recommendations made by the country’s regulator. To comply with legal requirements, Hawex uses internal control systems, as well as conducts customer due diligence. This helps to identify and stop criminal schemes promptly, including evasion of sanctions and financing of terrorism.
Unfortunately, the methods of fraudsters do not stand still, creating new workarounds of protection and verification systems. Therefore, high quality compliance with AML requirements is an expensive and labor-intensive procedure that requires constant modernization and flexibility. The Hawex AML complex is maintained exclusively with the help of internationally recognized and certified providers. In addition to the technological component, Hawex pays special attention to hiring qualified employees — AML officers, each of whom has a confirmed certificate and membership in ACAMS (Association of Certified Anti-Money Laundering Specialists). This allows the Hawex AML team to be aware of the latest innovations both in their jurisdiction and in the world, and most importantly, to successfully apply them in their work.
Regular staff training is an important part of implementing AML measures at Hawex. The company conducts training not only for employees who work directly at AML but also for the so – called “first line of defense” — account managers — to identify suspicious customers at the stage of initial negotiations. Hawex is confident that high-quality monitoring is possible only on the Four Eyes principle, when several employees check the stages of work for compliance with prescribed requirements. The Hawex team is regularly informed about changes in legislation and international legal acts, new requirements of regulators and payment systems, as well as the latest developments in the field of AML control software. In addition, employees study real cases of other financial organizations for the correct interpretation of certain requirements.
To confirm Hawex’s compliance with AML standards, an external audit of internal control systems, including the actions of its employees, is regularly conducted. If any inaccuracy is detected, the Hawex team promptly develops a change plan based on the auditors’ recommendations.
Hawex KYC: the company knows its customers
When opening an electronic wallet or a banking product, the services ask us to take a picture of ourselves and an identification document in real time. This is necessary to compare the data from the document and the person purchasing the product — this is the primary KYC check with any financial service provider, including Hawex. And if the real owner of the document who is not on the sanctions or other unwanted lists wants to use the services, then there are no obstacles to cooperation. The desire to remain anonymous at all costs is often interpreted by financial organizations as the first sign of unreliability of a potential client — after all, a person with legal income and legitimate goals has nothing to hide.
The history of fintech knows many examples of what the absence of KYC leads to. Fraudsters gain access to financial instruments by conducting transactions anonymously or — worse — under a false name, which leads to trouble for this person. In addition, the use of a financial product by persons included in the international lists of unreliable persons or sanctions lists is considered a violation of regulation by the company itself. That is why Hawex KYC is one of the fundamental measures to meet the requirements of AML.
Strict adherence to all AML requirements and thorough Hawex KYC verification makes the company a reliable player in the financial services industry. Hawex is confident that the integration of the latest developments in the field of AML will help it to grow and attract even more customers.