The KYC compliance solution that bridges the old and the new in China

15 March 2018

China’s meteoric ascent to economic superpower status has been accompanied by an adoption of high-tech innovation that has left much of the rest of the world in its wake.

That readiness to embrace the new is enabling overseas compliance officers to surmount hurdles common in a nation where officialdom is built on traditional practices.

Know Your Customer’s app-based digital client onboarding and anti-money laundering solution is bridging a culture gap that is otherwise making KYC time consuming and expensive for foreign firms.

Obtaining personal information from individuals is bread and butter for compliance departments. But in China, it’s a tricky task for the simple reason that the Chinese have, by tradition, closely guarded their individual privacy and discretion.

To ask someone for the sort of detailed personal information required by AML and onboarding regulations in other jurisdictions is anathema to most people in the country. To ask is to pry, and considered insensitive, especially for high-net worth individuals.

It’s a matter made all the more thorny by the relative novelty of AML in China. There’s a lack of understanding of its meaning and why officers conduct AML checks. Local professionals are likely to think their overseas questioners are being rude when they ask for the sort of data necessary for KYC compliance.

Consequently, direct requests for personal information may be met with hostility that can be very stressful at the outset of a potential new business relationship.

Fortunately, innovations built into Know Your Customer’s digital platform enables compliance officers to sidestep any such awkwardness by tapping into China’s embrace of technology.

Most of modern Chinese life can be transacted online. People are very familiar with using an app to manage every aspect of their day to day activities. Sites such as WeChat, Tencent and Alibaba offer everything from e-commerce to gaming and social networking on single mobile platforms.

The document upload, verification and certification technology built into our app perfectly fits the modern Chinese lifestyle. It’s quick, easy and intuitive. But most importantly it means we can request personal data indirectly, in a way that doesn’t risk upsetting cultural sensitivities.

Being asked to upload documents is likely to be far better received than a request to photocopy a document, have it certified and courier it to us.

The success of the app illustrates how we’ve been able to leverage our proprietary technology to meet the demands of China’s ever-changing regulatory environment.

That’s not the only innovation making life easier for KYC activities in China.

By law, an individual’s personal data cannot be taken beyond its borders. That presents difficulties for companies’ in-house compliance teams that don’t have a local office.

We do have an office in China and that’s provided us with a base from which we’ve been able to nurture relationships with government agencies and other bodies, securing from them unrivalled access to data sources on companies and individuals.

We’ve leveraged those relationships in ways that add value to our digital offering. For a start, we can verify an individual’s ID number thanks to access to a government-sourced database, a tool that gives our customers an unparalleled advantage in their KYC activities.

And for corporate searches, we draw on the centralized company register to present customers with verified official documents. China’s registry issues documents with a wealth of useful information unavailable from other jurisdictions’ registries. While that document is issued in Chinese, Know Your Customer captures all of that data in an accurate translation, which we hand to customers with a copy of the original.

Through technological know-how and with an experienced team on the ground our

end-to-end solution enables our customers to meet the demands of modern regulations in a country that cherishes cultural and social practices that go back centuries.

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