How KYC and AML Helps Capital Markets in Regulatory Onboarding?

How KYC and AML Helps Capital Markets in Regulatory Onboarding?

Capital Markets CIO Outlook | Thursday, December 26, 2019

Capital market companies are treading new paths of KYC and AML with significant aid from technology-backed applications.

FREMONT, CA: Contrary to the continuous scrutiny that the banking sector faces with respect to securing business operations from risks, the capital markets have always had limited focus on the same issues. However, with changing dynamics in the era of global connectivity and trade, the risks faced by capital markets are increasing. There have been cases of fraud that have impacted trading and investment firms big time. This has led to the capital market companies adopting KYC and AML as the essential components of their action plan in dealing with frauds and security threats. To make these plans more effective, companies can undertake a technology-efficient approach and ensure proper enforcement of it.

Client regulation methods like KYC and AML are now becoming a priority for capital market companies. In addition to regulatory bodies enforcing them, companies themselves are developing technological capabilities that help in facilitating KYC and AML. Business operations and transactions in the capital markets are complex and fast. These aspects expose companies in the capital markets to vulnerabilities that come in disguise. By formulating stringent frameworks with the help of KYC and AML, companies can have better control and monitoring capabilities over the activities of stakeholders and clients, which will eventually help in improving security posture.

KYC helps financial institutions have a better understanding of the multiple parties involved in transactions. With accurate information available to the companies through KYC, transparency in operations becomes feasible. Apart from protecting organizations from falling prey to frauds, KYC helps firms build resources for regulatory compliance. Technology has played a crucial role in enabling capital markets to deploy KYC and AML. Technology vendors have been offering exclusively developed software solutions that equip capital market firms with the capability to carry out KYC and AML effectively. 

With the power of artificial intelligence, machine learning and data analytics, KYC, and AML solutions are allowing capital markets to embrace the client authentication and verification processes rapidly. From adding layers of intelligence to automating scanning and reporting, digital solutions are at the forefront of the KYC and AML revolution in capital markets.

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