Regulators' Demands for Risk-Based Customer due Diligence are Spur to Best Practice, Says Norkom Technologies |
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Norkom Technologies
55 Strand Street Great
Dublin 1, Ireland
Press release date: February 26, 2007
New White Paper Outlines how Regulators' Demands can be met
BOSTON, Massachusetts, February 26 -- The Third EU Directive, being enacted by many EU countries this year, is playing a pivotal role in setting the worldwide standard for customer due diligence. Complimentary regulation arising in American and Asian markets mirrors its call for a proactive, risk-based approach towards customer acceptance and ongoing monitoring.
"While some organizations have quailed at the complexity of the task, enlightened companies view a risk-based approach with some relish, believing that, if it can be practically achieved, it presents a way to prioritize customer their customer due diligence activities, improve their effectiveness and manage associated operating cost," says Rosemary Turley, Director of Norkom Technologies.
Turley maintains that success lies in allocating an appropriate risk profile at the point of account opening then monitoring and adjusting that risk profile throughout the customer lifecycle.
"If 80% of new customers can be identified as low risk at the outset, justifying a minimal verification process, then the majority of new business can be brought onto book quickly, leaving only a minority to pass through a more rigorous process - making good sense for the business.
"However, that is just one step in the process; automatically adjusting the customer's risk profile as their circumstances or behavior changes is imperative for a robust risk-based approach. Ensuring that the level of monitoring activity also changes accordingly makes the difference between maximum efficiency and wasted effort," says Turley. "Consistent and accurate changes to risk profiles allow investigative resources to be targeted where they deliver most value."
Norkom's white paper 'Beyond Knowledge: 21st century customer due diligence' offers the following advice for companies pursuing a risk based approach to customer due diligence:
Customer acceptance
oDefine risk using a three-way matrix linking, geographical risk, product or service risk and entity risk. Codifying risk according to the geographies in which the customer trades, the complexity of the services they use and the business in which they are involved allows an accurate initial risk assessment to be made quickly.
oUse automated workflows to speed up the application review process supplemented by direct links to internal and external verification databases and watchlists.
Managing the risk profile
oUse detection alerts to automatically highlight any changes in static information - addresses, telephone numbers, board member changes and so forth - and link directly to external and internal information sources to check the validity of the same.
oAdjust the level of monitoring activity in line with the changing risk profile of your customers to ensure effort is focused towards highest business risks.
For your free copy of Norkom's white paper 'Beyond Knowledge: 21st century customer due diligence' call Rosemary Turley on +3531-873-9600 or email rosemary.turley@norkom.com.
About Norkom Technologies: Norkom Technologies is a leading provider of financial crime and compliance solutions to the global financial services industry. Its solutions enable organizations to detect and combat financial crime, reducing their operational losses, and addressing the industry's ever-changing compliance and regulatory requirements. Its software suite is underpinned by a common technology platform which can be configured to detect and investigate multiple types of crimes. Norkom provides the infrastructure for an end-to-end financial crime strategy while offering a range of solutions to address immediate business issues such as anti money laundering, watch list management, card fraud, ID theft, internal fraud, market abuse or customer due diligence. Norkom's approach reduces total cost of ownership and protects clients from large-scale technology investments with every new type of regulation or crime.
Founded in 1998, Norkom has operations across North America, Europe and Asia Pacific. Clients include: HSBC, Credit Agricole, Fortis, Rabobank, Standard Chartered Bank, Erste Bank Group, Travelex, the New York Clearing House, Bank of Montreal Financial Group, Allied Irish Bank, KBC Bank and National Australia Bank Group.
Source: Norkom Technologies
Contact: Rosemary Turley, Marketing Director, Norkom Technologies, Tel: +353-86-829-1393 rosemary.turley@norkom.com or Hilary Duffy, Marketing Manager, Norkom Technologies, Tel: +353-85-121-9414, hilary.duffy@norkom.com
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