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Home Forums Australian Financial Services Licensing (AFSL) Forum How do retail and industry funds verify ID and perform a risk assessment if they do not see the client face-to-face?

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  • #2382 Reply

    In terms of AML/CTF, how do retail and industry funds verify ID and perform a risk assessment if they do not see the client face-to-face?

    #3062 Reply
    Performing a risk assessment without meeting a client requires the capture of relevant Know Your Customer (KYC) information and other information (e.g. Investment Options) in order to categorise the risk of the account (low/med/high) and then perform the relevant risk weighted identity verification.  Risk assessment can be based on a number of factors such as the client’s product selection, occupation, country of residence etc. – it is ultimately up to the organisation to define the rules based on their service offering.  To perform a risk assessment and subsequent required identity verification it is most efficient to capture client application data for new accounts electronically.
    Off the back of electronic capture of application information, Electronic Identity Verification is a method that can be utilised in order to verify identity without meeting the client face-to-face.  It is an acceptable method of identity verification under the AML/CTF Rules (and used by industry) however requires a more stringent check to be performed in order to meet the Safe Harbour standard.
    Failing a successful electronic identity verification (or the risk assessment concludes that an electronic identity verification will not be a sufficient check), alternate ‘paper’ methods can be used, e.g. requesting the client sends in (via fax/email/post) certified copies of Passport, Drivers Licence etc.
    Regards,
    Nick Boudrie
    #3064 Reply
    Paul Derham
    Paul Derham
    Member

    Hi Danielle.

    I agree with Nick that online verification is increasingly common. Another useful bit of information is AUSTRAC’s report on how superannuation trustees meet their AML/CTF requirements.
    Please feel free to contact us if you require further information.
    Author:  Paul Derham
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