Essentially, it means that the risks related to financial crime can never be completely mitigated. Regardless of how reliable your sources are or how skilled in research your KYC team is, you can never be 100% certain that all your customers are who they claim to be and hide no criminal intentions.
Therefore, it is vital to create a KYC policy that comes as close as possible to this ideal. We are constantly communicating with the local regulatory authorities worldwide and thus designed a complex of basic recommendations based on this foundation. As a result, your precautions will not only suit the legislators but will also be not too complicated and burdensome for the company.
Partly, this flexible solution is possible because legislators normally leave wide discretion for companies regarding their KYC policy details. However, this freedom of action and the absence of any precise instructions result in great overall uncertainty.
Most companies simply cannot fit their activities into the KYC framework, even banks. Among banks that have been fined for AML and KYC violations are all 10 of the biggest banks in Europe – HSBC, Barclays, and Lloyds from the UK, French quartet BNP Paribas, Crédit Agricole Group, Société Générale, and Groupe BPCE, Germany's Deutsche Bank, Santander of Spain and Dutch bank ING.
Others to have been fined in recent years include the British banks RBS and Standard Chartered, Italy's Intesa Sanpaolo SpA, UBS Group and Credit Suisse of Switzerland, Spain's Banco Bilbao, Dutch institution Rabobank, and Nordea Bank of Sweden.
In these circumstances, the wisest solution for any business would be to delegate its KYC procedures to a neutral actor that only specializes in KYC compliance and is relatively independent from the main policymakers, such as national legislators or the largest banks.