TONBELLER AG Extends Solution Portfolio With Siron Know Your Customer to Fight Financial Crime and the Financing of Terrorism

20 January 2011

New solution Siron Know Your Customer closes the gap in the fight against financial crime

TONBELLER AG adds Siron Know Your Customer (KYC) to its Siron compliance solutions portfolio. The solution supports financial institutions in complying with the local and international laws and regulations to ensure compliance with statutory check and risk assessment requirements for new and existing business relations also known as Customer Due Diligence (CDD).

SironKYC helps financial institutions to avoid damage of their reputation and therefore prevents customer and business loss as well as economic damage of other customers and shareholders. SironKYC covers the entire process of new customer acceptance from standardized electronic input of customer data, automated matching with PEP and embargo lists generating a customer risk rating and may easily be integrated in the existing infrastructure.

SironKYC offers a very flexible setting. It can either be used as a stand-alone solution or could be integrated with Anti Money Laundering or Anti Fraud solutions like SironAML and SironFD. The solution is also open to integrate with variety of third party solutions e.g. for verification of identity documents.

Through an automated and standardized information input, the solution leverages efficient business processes. Based on easy to create and individual flexible questionnaires for customer acceptance, SironKYC enables compliance with legal requirements to risk rate a customer and perform the appropriate due diligence for the business relationship.

Once the customer acceptance has been completed, it gives the financial institution the capability to continuously monitor the requested customer. The solution monitors the risk appetite of the relationship which may change overtime, notifying the compliance department to perform Enhanced Due Diligence (EDD). SironKYC is capable of handling natural and corporate clients and offers the capability to process parent trees to identify the ultimate beneficiary owner.

Laws and Regulations

Apart from the obligation to comply with legal requirements, financial institutions cannot afford to have bad press on supporting money laundering or criminal activities, even if they are misused for this purpose without their knowledge. Hence, financial institutions are highly interested in introducing adequate internal control measures and systems. The regulations according to the KYC principle are incorporated in guidelines and laws, such as the US Patriot Act , the Bank Secrecy Act (BSA) and the 3rd EU Money-Laundering Directive.

Money Laundering, Financing of Terrorism, and Fraud

Due to legal requirements, financial institutions must ensure for natural and legal persons and their beneficial owners that none of the accepted customers poses a threat to the institution in terms of criminal activities and the financing of terrorism. Financial institutions are obliged to apply the Know Your Customer principle to all unknown customers prior to customer acceptance in order to recognize the risk potential originating from the customer relation. This is the basis for risk-based monitoring of customer relations regarding money laundering, the financing of terrorism and fraud.

Accelerate Business Processes, Provide Information

Financial institutions are legally required to uncover information, such as the purpose of a business relation or the origin of funds. Furthermore, it must be decided whether the potential customer is a politically exposed person (PEP) , since business relations to this group of people are subject to enhanced due diligence. In addition, the institutions must guarantee that the person data is matched with international embargo lists in order to prevent business relations with criminal individuals, organizations and/or to sanctioned countries.
This information and data is already acquired and archived for new customers by the institutions. However, the data is mainly used for documentation purposes and is not made available for use in IT systems.

The employees responsible for the fight against financial crime have no opportunity to include the customer information, which has been obtained during customer acceptance, into IT-based research systems to detect financial crime. Hence, plausibility checks, the verification of the information supplied, as well as systematic risk classifications of customers based on their actual behavior are not feasible.

SironKYC Provides Security and Continuity

This gap is closed by SironKYC . The solution provides a standardized electronic input of customer data, automated matching with PEP and embargo lists on customer acceptance and enabling the institution to classify the risk. This leads to specific instructions for account managers. In case of high risk the money-laundering officer is notified by automated e-mails.

Based on the checked data, the decision to accept or reject customers can be taken immediately, followed by the risk classification (e.g. low, medium, high or unacceptable).

This analysis is done in real-time during customer acceptance. From this point in time, the information provided during customer acceptance is continuously checked for deviations in actual customer behavior. Significant deviations from the expected customer behavior recorded during customer acceptance compared to the actual behavior should raise the question: "Has the customer provided incorrect information or what is the reason for the change in behavior?" which could be an indicator for criminal activities that have an impact on the institution, its customers, employees, and shareholders.

Information from the Beginning – Online and Real-time

SironKYC processes all relevant data and information acquired and checked during the customer acceptance process according to institution-specific risk classification for money laundering, fraud and the financing of terrorism.

For ongoing risk monitoring, this data is automatically sent to Siron AML, the money laundering research system and to the system for the detection of fraud, SironFD.

The huge benefit of SironKYC is the possibility for immediate risk assessment of the new customer relation. The information on person and business relation supplied by the customers can now be compared with their actual behavior. If the customer behavior shows a significant deviation compared with the stated behavior during customer acceptance, the risk classification can automatically be increased and an alert will be send for revision of the customer. Based on internal and legal procedures adequate measures can be taken. By doing so, the customer relation can be monitored on an ongoing basis and therefore compliancy is ensured according to local and international laws.

Torsten Mayer , managing director of TONBELLER AG is convinced: "With SironKYC , we enable financial institutions to meet the legal requirements of the KYC principle and ongoing risk monitoring at a stage as early as customer acceptance and to assess their risks with specific respect to financial crime. TONBELLER therefore can considerably contribute to the prevention of fraudulent actions, money laundering, and the financing of terrorism."

Mayer continues: "The solution ensures that legal requirements are fulfilled and business processes remain efficient at the same time. Furthermore, financial institutions are protected from potential damage resulting from criminal activities and the reputational damage going along with it. Our customers can enable themselves to identify illegal activities at an early stage and take appropriate counter measures. We enable our customers to proactively detect potential risk at an early stage – an important step for taking action before a crime is committed and to not just react when the damage actually occurs."

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