accuity.com
What type of customer do you currently screen?
What are the current challenges in your compliance screening process?
31%High net worth individual customers
11%Others
A 2019 snapshot of how financial institutions tackle KYC and AML compliance in China
Across our Financial Crime Compliance conferences in China, Accuity conducted a market survey with the leading financial institutions’ compliance & AML professionals. Highlighted below is a synopsis of some of the key findings from the survey.
Repeated checks and manual processes
57%44%
44%
40%35%
10%
Lack of audit trail & evidence / records of checks performed
Others
Financial institutions in China are screening the ultimate beneficial owners of correspondent banks and corporates, proving they are putting more effort into applying enhanced due diligence measures.
Lack of quality reference data
Extended working hours
Repeated checks, manual processes and the lack of quality reference data are the biggest challenges for China’s financial institutions.
Difficulty in setting up internal compliance policy for all staff to follow
65%Correspondent banks and their ownership structure and ultimate beneficial owners
64%Corporate customers and their senior management and beneficial owners
56%Counterparties or third party payers
Require AML/CFT lists by the People's Bank of China
State Owned Enterprise (SOE)
Sanctions List
Politically Exposed Persons (PEP)
64%
50%
50%Adverse Media and Enforcement Data
67% 67%
What data sets are you currently lacking that would help you enhance your KYC performance?
What improvements are needed to your financial institution's current AML/CTF screening system?
Have an automatic on-going screening function
Improve the screening accuracy and set alerts for high risk accounts / payments
Have better audit trail and record keeping functions
42%
38%
44%
58%
40%
49%
The majority of financial institutions require automation, accuracy and being able to set alerts for high risk accounts/payments to be improved in their screening system.
PEP data, Sanctions List and required AML/CFT lists by the People's Bank of China are the most important data that financial institutions in China would like to have access to.
50%
accuity.com
What are the main challenges of identifying PEPs?
database with comprehensive coverage
46Lack of PEP
%Hard todefine a PEP
47
%of foreign passport
Most financial institutions find that their greatest challenge is how to define a PEP, and identifying them from their data sets.
Other
8%
31%Identification
Set up workflows for different layers of personnel to review the screening results
Reduce the false positive rate
Add on-going monitoring functions / automatically alert users for new matches
Have more updated and higher coverage for data (i.e. sanction lists / PEP data)
What type of screening system do you currentlyhave?
What reference data sources are used in your current screening process?
Public sources (OFAC, EU, HMT etc)
Reference data provided by partner/associations
35%
54%Third party systems
29%
6%Other
accuity.com
%
Transaction monitoring systems
67
%10Internal system integrated with screening function
03%Others
The vast majority of financial institutions only have a transaction monitoring system. This shows a lack of KYC automation.
By using data from 3rd party systems, respondents have seen an improvement in the quality of the data they use.
How do you check the ultimate beneficiary owners of your customers?
Public Sources
17% Third-party
data provider
In-houseresearch
Do not know how to check
50% 29 %
4%
56
%
To learn more about our solutions contact an Accuity representative or visit accuity.com/cn
Most financial institutions in China are collecting UBO information either direct from their customers or from public resources e.g. annual reports. This shows that financial institutions are spending a lot of time and resource gathering this key information.
Direct from customers
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