The crucial role of KYC in shaping a compliant framework

Could you introduce QGen Group to our readers? What are the services you provide and how did this start?

QGen is a KYC/KYB/KYP managed service provider, which started in late 2006 offering these services to regulated entities in the EU and beyond.

In order to provide a better understanding of our services, in simple terms, know you customer (KYC) provides a thorough understanding of who your client or customer is by obtaining verifiable information to identify an individual, most common being the identification documents and proof of address as part of the due diligence process.

Know your partners (KYP) gives a detailed understanding of the company you are about to go into business with, and it comprises of a number of due diligence checks in order to take the necessary precautions or controls when engaging or transacting with entities. Know your business (KYB) provides all the information necessary with an understanding of the company structure filtering through complex structures and complexities in a different setup of different companies. The information will help adhere to AML/CFT, conduct the necessary due diligence and assess the risk by reviling curtail information such as involvements or business, and ultimately, detailing who is the beneficiary of such companies.

KYC, KYB and KYP are all crucial aspects as part of anti-money laundering and funding of terrorism regulations, risk and due diligence. Being equipped with efficient mechanisms, top notch technology and research developments, QGen will allow you to assess your clients in a way that leaves no stone unturned; we are here to keep your business safe by making sure you really know your customer, business and partner/s.

QGen team has decades of experience in both the regulated and non-regulated markets. From your company’s perspective, is it difficult to meet compliance specification for each country?

Meeting, satisfying and ensuring compliance requirements is our primary focus. Our client’s peace of mind in relation to regulatory requirements is always first on our agenda, thus placing QGen in the forefront of managed services KYC/KYB and KYP service providers. Although, one may find certain commonalities regarding laws and directives, the implementation may differ according to one’s interpretation and this is something that takes research, time, proper analysis and dedication.

Another key aspect is to also understand different requirements adopted by different companies, and when it comes to operating in different jurisdictions and sectors, to ensure that our clients from inception are in adherence to the legal framework and are ‘compliant’. 

There have been many discussions regarding banks being used, intentionally or unintentionally, by criminal elements for money laundering activities. What are the problems that you see in this industry right now? 

Banks were, are, and will continue to be targeted for money laundering. There is no such thing as a client unintentionally engaging in money laundering. Delving deeper into the operation of a banking institution, banking products and technology evolve in such a manner that are becoming more convenient, flexible, and readily available for the customer.

The risks are further increased by operating an international client portfolio, services that do not require interaction with the customer, abilities to transact are readily available and without proper risk mitigation bank increase their vulnerability to be used for illicit purposes. Another scenario would be banking institution looking to increase the risk appetite, therefore, requiring more stringent KYC/KYB.

For this reason, it is very important to invest in proper controls and to assess the vulnerability of new and evolving technology and products with the aim to facilitate the clients banking needs that in return may be misused for illicit purposes. Therefore yes - the possibility of a bank unintentionally engaging in money laundering does exist.

Currently, banking societies have very strict customer acceptance policies brought by regulatory pressure and the ever-increasing costs relating compliance. The lack of a specialized function within a banking institution may be quite a business disruptor.

What are the main elements that make KYC solutions form QGen Group stand out from other services like it?

QGEN has distinguished itself as a KYC/KYB/KYP managed service provider, offering an adaptable though tailored method of risk and compliance. We ensure that our clients, both upon inception and ongoing thereon, meet all the detailed regulatory requirements, while also ensuring a best practice and seamless customer journey.

Understanding our clients plays a major role in providing the best possible service. As stated, each company has its own policies, procedures and controls in place. QGen does understand the different needs within the industry and ensuring full confidentiality and adherence to regulations is what makes QGen a reliable partner in the industry. 

Knowing what the industry wants, understanding customer needs and also having numerous years of firsthand experience, we are able to provide our clients with an efficient and timeliness on-boarding (by having the right SLAs in place) also aimed to lower costs. QGen provides a high knowledge pool, experienced staff and cutting edge systems that cater for flexibility to target and tap into new jurisdictions and different financial institutions - banks and customer service providers amongst others.

We hear a lot about frictionless customer experience and always keeping the customer happy. How can KYC solutions enable this, especially since there are countries like India that propose tighter KYC norms?

KYC solutions are available according to the jurisdiction they need to be applied to. There are instances where regulations in certain jurisdictions are more stringent than others in relation to different products and controls. KYC solutions in such instances are, as stated in the previous question, to ensure a best practice and a seamless customer journey to bring the desired result without any obstacles. Tighter KYC should in no way hinder a company’s operation, but strengthen the quality of clients held. The onboarding challenges can be mitigated through technological developments and the client onboarding can become easier, more effective, and less time consuming, while the level of monitoring ensures quality, adherence, fraud and financial crime prevention.

About Philip Bugeja

Philip Bugeja is head of compliance at QGen and a specialist in the prevention of financial crime, Bribery and Corruption, Anti Money Laundering and Terrorist Financing, He was involved within the financial crime unit with a large European bank and served as head of compliance and MLRO for an international law company. Philip was also briefly involved in the investigations at the Financial Intelligence unit of the Malta Financial Services Authority. Philip is a sought after advisor for a number of companies companies setting up operations and licensing in Malta.