Banks and financial institutions will be able to verify new customers up to 80% more quickly according to Kyckr via its new Ultimate Beneficial Ownership verification tool. The overall aim is to ramp up the fight against financial crime and money laundering.

Since the Panama Papers were published in 2016, leaks have revealed the hidden beneficiaries of almost 800,000 offshore companies. They are often used laundering the proceeds of financial crime, evading taxes or disguising the true ownership of property.

Identifying and verifying the ultimate beneficiary of a company is a regulatory requirement. Indeed, it is an essential part of the KYC process for financial institutions. Kyckr says it can take a KYC analyst up to eight hours to uncover the details of every UBO in a complicated ownership structure.

Onboarding each customer, supplier can cost banks $400-$500

Moreover, resource costs regularly exceed $400-500 per customer or supplier onboarded. For a bank with 100,000 entities to verify annually, this could mean UBO verification costs of $40m per annum or more.

Kyckr says that its latest UBO verification capability automates the process of identifying the UBO. And it provides accurate verification in seconds, not hours. By combining live, legally-authoritative company data with the latest technology, it extracts, normalises and matches ownership information. In addition, it automates the analysis and visualisation of corporate ownership structures and calculates ultimate beneficial ownership in real-time. This automation saves regulated businesses significant time, effort, and ultimately money. The result is that analysts can focus on higher-value tasks.

2022: AML fines exceed $3bn

In addition to the costs of manual UBO verification, financially regulated businesses who fail to properly verify their customer and supplier UBOs risk significant regulatory fines. According to data gathered by Kyckr, in 2022 global financial institutions were fined over $3bn for AML compliance breaches. The majority of the fines relate to due diligence failures.

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Steve Lamb, COO at Kyckr, said: “Our customers include five of the top 10 global banks. And two of the top five payments companies. In discovery with customers, we found that the UBO verification process was one of their major pain points. Without access to live, accurate data, unwrapping the ownership structure of a company takes hours for an analyst to complete. Ultimately, that costs banks millions every year.

“We’re passionate about using technology and live data from the world’s legally-authoritative sources to help companies stop money laundering. When you stop money laundering, you also stop human trafficking, the drug- and illegal wildlife trades—even terrorism. All these criminal activities rely on money laundered through legitimate companies and financial institutions. With Kyckr’s UBO Verification solution, we’re making the job of financial criminals much, much harder.”