KYC (Know Your Customer) analysts are usually a part of Risk Management Teams of various financial (sometimes manufacturing, technology, and consulting) institutions. They verify the submitted documentation and perform due diligence procedures of all levels (SDD, CDD, and EDD) for new and existing customers to assess the risks associated with each private and legal entity and ensure compliance with the existing legislation.
The responsibilities of a KYC analyst
Simply put, there are three main goals of a KYC analyst’s work:
- to guarantee that the people/businesses applying for opening of an account are really who they say they are.
- to prevent money laundering, terrorist financing, and other illegal activities.
- to collect the most accurate data for compliance purposes.
These goals are achieved through verification, the creation of risk policies, and ongoing monitoring.
Verification and assessment
At the stage of opening the account, the KYC analyst will firstly conduct a check of the applicants’ documents to find out whether the provided information is genuine, full and the potential customer/partner doesn’t belong to any of the high-risk groups (PEPs, sanctioned persons, etc.). These procedures are referred to as Due Diligence and involve information collection and the screening of different complexities. Customer data is checked against a variety of databases and the risk category is assigned.
Risk policies and procedures review
As the regulations get stricter every year, KYC analysts also play a vital role in the compliance function. They generate reports for the regulators, complete due diligence reviews and use these to spot vulnerabilities and areas for improvement in the existing risk-management system e.g. propose new risk mitigation tools or controls and suggest improvements for the due diligence questionnaires and the onboarding procedure as a whole.
Customer behavior and market analysis
The listed duties would be impossible to fulfill without the constant monitoring of new and proposed regulations, in addition to the review of customer complaints. So, ongoing data collection and research have become another part of the KYC analyst routine. The gathered information can be used in many ways, such as for the creation of the compliance training materials for staff, or for the enhancement of the marketing materials for the company’s products.
The skills of the KYC analyst
Apart from withholding the relevant education (Accounting, Finance, or Business Administration) or certification (e. g. CAMS or any other KYC registration agency) and the knowledge of the jurisdictional specifics, a good KYC analyst should be a strong communicator, manager, and organizer. Thoroughness, responsibility, and self-sustainability are also a must as the responsibilities warrant little or no supervision, and the smallest mistake can cost a fortune.
KYC software
Considering the above said, many businesses opt for using KYC software, which allows them to eliminate the human factor and attain the highest level of accuracy possible for the result. Businesses may also choose to use humans and machines in combination.
