What is Periodic KYC?
Periodic refresh or Periodic KYC is the process used to regularly review, verify and update information relating to clients after they have been onboarded.
Often used by banks or financial institutions, periodic refresh includes activities such as:
- re-verifying customer information
- reviewing and updating customer risk profiles
- monitoring customer transactions and online presence to detect suspicious activity for financial crime such as money laundering.
Traditionally, KYC is conducted periodically, after a specified amount of time has elapsed.
The frequency at which periodic refresh is performed at pre-defined frequencies can vary depending on the regulatory requirements of the jurisdiction, the financial risk appetite of the financial institution and on the risk profile of the customer.
If the customer has a low-risk small retail profile, refresh can be done at yearly or even three yearly intervals. However, if the customer has a high-risk corporate profile, periodic refresh can be done between monthly or annual intervals.
Why Periodic Refresh is Needed
Regulatory authorities require financial institutions to identify and verify their customers, as well as regularly monitor customer activity.
Periodic refresh helps ensure customer information used by institutions is accurate and that systems are able to detect suspicious activity.
By regularly reviewing and updating customer information financial institutions can detect any changes in a customer’s information or activity that may indicate financial crime and take appropriate action to prevent financial crimes such as money laundering and terrorist financing.
Problems with Current Solutions
Since periodic refresh is done at pre-defined frequencies, information relating to the customer can be missed in between the intervals that periodic refresh is performed.
- If information on the company is updated on a corporate registry, the change won’t be detected until the next periodic refresh interval leading to information associated with the customer to not be updated.
- Another example of this can be when the customer has been reported to commit money laundering in the media, the periodic refresh system will not be able to detect this adverse media as it happens and so the risk profile of this customer will have changed without the financial institution realising.
With smartKYC’s award-winning technology, businesses can eliminate the need for manual methods of document verification and can instead use artificial intelligence identity verification solutions.
With smartKYC, you will not just receive alerts on material changes to client risk profiles as reported in corporate databases, registries or open web media, but we also ensure those alerts are relevant, genuinely new information and are delivered with appropriate timing.
Discover our Automated KYC Solution
If you’re interested in learning more about how smartKYC’s automated KYC software can transform the efficiency and effectiveness of your KYC and enhanced due diligence operations, book your demo today.