DALLAS– October 18, 2018 – GIACT Systems®, the leader in helping companies positively identify and authenticate customers, today announced the release of a report, Streamlining KYC: Best Practices in the Collection and Processing of Beneficial Owners, detailing compliance specifics and best practices around beneficial ownership.
In May 2018, the Financial Crimes Enforcement Network (FinCEN), U.S. Department of the Treasury, put into effect a rule requiring covered financial institutions to comply with new Customer Due Diligence (CDD) standards. The rule requires financial institutions to verify the beneficial ownership of their legal entity customers, meeting KYC, including OFAC, requirements.
“Noncompliance isn’t an option. FIs will have to figure out a way to reduce the high cost of compliance, while ensuring that they remain in compliance.”
As the requirements around beneficial ownership continue to change, financial institutions will be responsible for adopting new protocols accordingly. Financial institutions implementing beneficial ownership compliance processes, for example, will need to tailor their collections to scale and match their tolerances for risk. According to FinCEN estimates, the new beneficial ownership requirements are expected to cost financial institutions $250 million in staff training in the first year of implementation alone.
Thewhite paper explores how financial institutions can streamline the collection and verification aspects of beneficial ownership in light of the new beneficial ownership rules. Ahead of FinCEN’s implementation of beneficial ownership rules, GIACT launched Beneficial IDTM– the first all-in-one digital solution to provide beneficial ownership information collection and verification, meeting the KYC, including OFAC, requirements of CIP. Beneficial ID allows financial institutions to significantly streamline beneficial ownership compliance, moving the process onto a simple, single digital platform.
“As beneficial ownership requirements continue to evolve, FIs will need to implement processes that can scale accordingly,” said David Barnhardt, EVP of Product, GIACT. “Noncompliance isn’t an option. FIs will have to figure out a way to reduce the high cost of compliance, while ensuring that they remain in compliance.”