Uncovering KYC Compliance Trends for 2023 #1
As we move into 2023, the fight against financial crime continues to change, posing new problems for institutions in all fields. More rules, regulations, and technology changes require creativity and flexibility to prevent financial crime.
KYC solutions are often associated with FinTech. Without a doubt, they may revolutionize how organizations interact with consumers across all industries. KYC’s simplicity makes onboarding new consumers easy and secure in many sectors. KYC compliance is supported by advanced fraud and anti-fraud solutions to catch and stop scams.
Grand View Research expects the Asia-Pacific to have the strongest growth rate among regional markets until 2030. Governments have established strict rules for businesses to use customer identification practices.
We would like to explore the trends for 2023 in 3 points.
ESG & KYC Compliance
ESG problems are now part of KYC’s due diligence.ESG, which stands for Environmental, Social, and Governance is a set of standards used to evaluate the sustainability and ethical impact of a company or investment. The Financial Action Task Force (FATF), an international organization that combats money laundering and terrorism, has influenced this tendency. FATF focuses on ESG breaches to combat terrorist organizations that profit from illegal mining and human trafficking.
UNEP states that environmental crimes are growing by 5-7% each year, which is two to three times faster than the growth rate of the world economy. Criminal use of the environment also causes the government to lose tax money. Estimates show that the government loses at least 9–26 billion USD in tax money each year.
Authorities will monitor business efforts on climate change, biodiversity, diversity, equality, inclusion, and worker wellness. Working with low-ESG firms might damage a company’s reputation and pose societal hazards. PwC considers that Asia-Pacific ESG legal change has been slow. Still, environmental and societal risks are progressively being monitored by regulatory organizations.
Summary
Some financial institutions and investors have started incorporating ESG considerations into their broader risk management frameworks. ESG risks may be associated with the companies they engage with as part of their due diligence processes and these assessments can help them make informed decisions about the environmental and social impact of their investments or business relationships.
We will share two more trends for 2023 in the upcoming blog.
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