Perpetual KYC introduction
Each day, financial institutions receive high numbers of customer-related events, which might represent an increase in risk to the business. Financial institutions need to assess all events automatically and perform the necessary due diligence activities efficiently to understand any associated risk changes.
Many different types of events are generated from numerous disparate systems. For example:
- A change of registered address in Pega Customer Service™.
- A complete name change from a third-party data provider.
- An internal AML escalation from the Pega Client Lifecycle Management™ system.
The nature and potential impact of events vary greatly and, by extension, have very different processing needs, including:
- Priority and service-level agreements.
- Level of interaction (events might require straight-through processing, manual tasks, or a fuller investigation).
- Events that require bundling to process together for greater efficiency.
How financial institutions handle an event also varies across different enterprises. A one-size-fits-all approach to event processing is impractical. Pega Client Lifecycle Management implements the concept of Perpetual KYC that uses a combination of the event-driven architecture of Pega Foundation for Financial Services, functional processing, and a configurable event-driven review journey to meet the ongoing due diligence needs.
Demonstration of legal name update event
An existing customer registers the new legal name of their organization through the front office of a financial institution. The financial institution wants to understand any impact of this event and take appropriate actions from a compliance perspective with Pega CLM KYC.
With the receipt of the event, the due diligence for the customer is now out of date, and as KYC analyst at the financial institution, complete the following tasks in Pega CLM KYC:
- Carry out screening for PEPs, sanctions, and adverse media on the new name.
- Collect new formation documents to confirm that the new name is legitimate.
- Answer a small set of targeted due diligence questions that are related to the event.
On completion of the tasks, the changes are persisted to the updated customer master profile and the financial institution system of records.
Event documents due diligence
Transcript
Hooper Jones Investments is an active customer. All the primary data is complete and up to date, including the due diligence questionnaires. The recent customer journeys show the original onboarding journey; no other cases are in flight for Hooper Jones Investments.
The Postman application simulates an external application by submitting a "Legal name - Update" event. The event contains key information to process the event, such as the customer ID, the type of event, and the data payload. The former name of the customer is Hooper Investments; the customer wants to change the name to Platinum Advisory, Inc. Click Submit to send the request to the Event Driven Architecture. The system returns a response, which indicates that the event is in a queue for processing. The system returns the appropriate error information if any data is missing or incorrect.
Based on the system configuration, a set waiting time would pass before a new Event Driven Review case is created. The case is also shown in the Customer 360 profile. Clicking the case number opens the new Event Driven Review case.
The case automatically skips the first two stages, Capture and Enrich, and stops at the Due Diligence stage. All but one of the subcases is complete, and existing questionnaires are still valid and reused.
The Events gadget in the lower-right corner displays any events that were processed in this Event Drive Review case. Clicking the name of the event displays information that assists you, such as the core data change, the date of the event submission, and the source of the event.
In the Requirements gadget, all requirements are completed, except for one. The new organization name for the customer, Platinum Advisory, Inc, is displayed. When you expand Platinum Advisory, Inc, you see that the Formation documents requirement is in the Document Collection stage. This requirement is the only item that is configured for you to complete again to collect documentary evidence of the legal name update. Clicking the name of the requirement opens the Requirement case.
Click Attach to collect a new Articles of Association document from the local file system. The analyst marks that the document is in good order and meets the validation criteria. Clicking Submit progresses the Requirement case to the Approval stage. Click Continue, and then click Approve to complete the approval. Add a comment, and then click Submit. A final submission shows that the approval is complete. You can click the ID for the Event Driven Review case to display the case summary. All requirements are now complete.
Event KYC due diligence
Transcript
The next task is to complete the Global KYC case. Click Open case to display two pending cases to complete in the Customer investigation stage. When you begin with the Screening case and open the Investigate matches assignment, a list of screening matches for the new name Platinum Advisory, Inc is displayed. For the purposes of the demonstration, all these matches are false. You can select all the matches by selecting the checkbox, and then clicking Bulk update. Select the False match resolution and the Unknown risk level of unknown, and then click Submit. Click Submit again to complete the Screening case.
The Screening case is now displayed as complete when you return to the parent case through the Global KYC case ID. When you click Open, the Adverse Information case is displayed. Click Continue to begin the Investigate matches assignment. As with the screening case, the Adverse Information results are also based on the new name of the organization. Assuming that all of these are also false, select an overall risk of and provide an overall reason of . Click Submit to complete the case.
When you return to the parent case through the Global KYC case ID, the Customer investigation stage is now complete, and the Global due diligence stage is active. On the Global due diligence stage, click Continue to display the assignment. There are three questionnaires in the right pane, two of which are already 100% complete. The system reused this information from the initial onboarding and remains valid.
There is a new questionnaire, Global - AML - Entity TDD, for the analyst to gather supplemental information about the change. TDD stands for Targeted Due Diligence. Because there is only one type of event in the case that requires targeted due diligence, there is only one item group with the event name that is expanded to display the questions. Filled out the three mandatory questions. All questionnaires are now complete. Click to progress the Global KYC case to the KYC Review stage for a review by a second set of eyes.
Click Continue to open the Global review assignment. Review the responses, and then click Approve. When the system asks whether customers need to complete the PDF of the questionnaires, select No to advance and complete the Global KYC case.
Click the parent case ID to show that the Event Driven Review case is complete. Navigate to the customer search, and then enter Platinum Advisory, Inc to return a match. When you click Platinum Advisory, Inc, the updated Customer 360 profile is displayed. The Recent customer journeys section shows that the Event Driven review journey is complete.
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