Nearly three-fourth (75%) of senior compliance and correspondent banking professionals have faced additional complexity in interpreting and adhering to local legislation ending up complicating the KYC compliance process, according to a new Accuity survey report.
Regulations such as 4AMLD and the FinCEN Final Rule regulations have placed more emphasis on KYC compliance process to identify the Ultimate Beneficial Ownership (UBO). However, according to the annual financial counterparty KYC survey 69% of the respondents said they found it challenging to procure reliable UBO information.
Nearly 76% of the surveyed professionals stated that rising costs and complicated processes have hindered KYC implementation.
Nearly 68% of the KYC compliance survey respondents attributed lack of specialists and skilled staff a challenge, while 77% said to have carried out repetitive tasks to complete KYC checks.
The survey found that 84% of the respondents reviewed high-risk entities differently compared to low risk entities. This figure stood at 74% in 2014 survey.
Accuity KYC industry specialist Dalbir Sahota said: “The rising cost of compliance and changing regulatory requirements are driving financial institutions to constantly evolve their systems, but their operations are not designed for continuous change.
“The laborious processes involved in KYC continue to present hurdles, which can only be overcome with a more comprehensive systems overhaul.”
The KYC compliance survey was joined by 100 banks, financial institutions, corporate as well as other government and regulatory bodies across all global regions.