Effective Know Your Customer and Moving Beyond a Check-List Approach
Fintelekt Advisory Services and the Asian Bankers Association jointly organised the virtual workshop for 2025 on Know Your Customer – Beyond the Check List Approach on April 22, 2025.
The resource person for the workshop was Julia Chin, aka Compliance Blackbelt, a seasoned banking and financial services industry professional with over 25 years of experience. Arpita Bedekar, Chief Operating Officer, Fintelekt Advisory Services hosted the programme.
This workshop focused on the evolving challenges in conducting an effective KYC process, emphasising the need to move beyond a rigid, checklist-based approach.
Effectiveness of Know Your Customer (KYC) processes:
Some of the largest financial crimes that have recently been investigated in Asia highlight the increasing complexity of financial crime, especially scams, fraud, organised crime and emerging trends like “money laundering as a service.” In the face of these trends, KYC should not be treated as a compliance formality but as a strategic, risk-based process integral to combating financial crime.
Importance of understanding customers:
The traditional checklist-based KYC process that is currently followed by financial institutions has its shortcomings. By relying solely on regulatory checklists without contextual risk understanding, institutions can miss sophisticated financial crimes that exploit the loopholes in the system. Understanding customers, counterparties, and third-party relationships in depth is in fact a crucial part of knowing the customer.
The key elements in an effective KYC Process, include:
- Enterprise-wide risk assessments
- Customer risk profiling
- Ongoing monitoring
- Identifying beneficial ownership
- High-risk customer behaviour
- Role of transaction monitoring
KYC should be a dynamic, risk-based process that requires professional judgment, contextual understanding, and proactive thinking — not just ticking boxes.
– Julia Chin, Trainer, Fintelekt
Building a strong compliance culture in financial institutions:
The workshop included a discussion by Julia on the need for a strong compliance culture, cross-functional teamwork using the “three lines of defence” model, and data quality to effectively assess and manage risk. She also proposed that the role of the compliance team in a financial institution must be that of a business enabler and not a gatekeeper.
The virtual workshop was well attended, with participants from 9 countries and 12 institutions, including banks, financial services, insurance companies, technology providers, asset management companies, money changers and consultancy firms. All participants received a Fintelekt-ABA Certificate of Completion for participating in the virtual workshop.