Resource sharing and widespread usage of innovation in combating financial crime has become the spotlight of today’s world. Special attention is drawn to the continuous improvement of customer due diligence and development of platforms for information sharing. The goal is clear and unequivocal: strengthen the ability to reduce the risks associated with money laundering and terrorism financing (ML/TF).
Currently, each country and financial institution chooses solutions that are most convenient for itself, resulting in multiple individual solutions. However, in order to achieve the highest standards of compliance, it is essential that each country, in collaboration with its financial sector and the largest actors of the real economy, decides on the single best way for the development of the shared KYC utility. Such cooperation would bring remarkable benefits since a country which achieves and maintains the highest standards of compliance improves its reputation and credibility in the international setting, reduces the overall administrative burden, and decreases the costs of business partner and customer due diligence.
Continuing its endeavor of ensuring compliance with the best world practice in the field of compliance in Latvia, the Finance Latvia Association (hereinafter – Finance Latvia) has prepared a report on the possibilities of introducing the shared KYC utility in Latvia. The report provides a broad insight into possible models and their advantages but does not itself propose to create a one.
“Last year, an innovative solution was implemented in Latvia – a public-private information sharing partnership. The roots of this model can be found in the United Kingdom. On November 23, 2018, high-level workshops were held in Riga on the topic of the best available technological solutions for “Know Your Customer” principle’s implementation, and for information sharing partnerships that would lead to more effective combating of financial crime “AML/CFT: RegTech & Partnerships”. These events were organized by Finance Latvia in collaboration with ACAMS Baltics Chapter, Microsoft and Citadele. After assessment of opinions and information provided in the events, and cooperation with representatives of public and private sector, Finance Latvia has prepared a report on the possibilities of implementing the shared KYC utility in Latvia.”
– Jānis Brazovskis, CAMS, board member, Finance Latvia.
The main findings of the Finance Latvia report on the possible models of the shared KYC utility:
Additional emphasis is placed on the following:
The report emphasizes that, generally, the shared KYC utility would apply to corporates, whereas to individuals merely in specific, high-risk cases or if the person him-/herself is willing to transfer his/her personal data using the shared KYC utility. The full report can be found here: KYC utility report June 2019 PDF