Customer Due Diligence

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Norkom’s CDD solution enables organizations to execute a risk based, efficient and effective process to ensure due diligence in the account opening process and ongoing, throughout the customers' lifecycle.

Knowing your customer is not just good for business, it is a regulatory obligation the world over. The US PATRIOT Act, the 3rd Money Laundering EU Directive, Australia's AML/CTF Act the OFSI B8 guidelines and the FATF 40 Recommendations all clearly stipulate that financial services organizations must take a risk based approach to their customer diligence processes. The concept is straightforward, however, for most successful execution is hindered by a minefield of challenges including:-

• Verifying the customer is who they say they are
• Effectively assessing and prioritizing risk
• Accurately identifying the risk a customer represents
• Validating assigned risk categories are correct
• Evolving risk categories through the customer lifecycle
• Demonstrating effective customer due diligence to the regulator
• Ensuring processes and procedures are effective and cost efficient

Norkom’s customer due diligence solution (CDD) enables organizations to overcome these challenges and execute the CDD process through specifically designed modules to identify, capture, assess, investigate, refine and report.  How does it work?

Identify

Assessing the risk - pre-defined and configurable CDD processes tailored to match risk categories.

Customers are the life blood of any organization and making it easy for them to do business with you is critical to success. That is why the Norkom solution has been designed to enable organizations to tailor their CDD processes to match the potential risk a customer represents to the business – the higher the risk the more diligence required.

How do we do it? – Firstly, the Norkom solution creates risk categories for organizations based on multiple parameters such as product range, customer type, and geographic risk criteria. Each risk category is linked to a pre-defined CDD process which clearly outlines the documentary evidence, the validation processes (including online checks to reference agencies) and the time frames that must be followed before customer acceptance.

The due diligence process can be tailored to match the different risk categories enabling organizations to focus their resources on validating high risk customers while ensuring that lower risk customers can commence business swiftly.

Capture

Automatically identifying and validating what you need to know.

Knowing what information you need to capture and validate about a customer before you do business with them is critical to compliance. However there is no one size fits all approach – different customer types require different information and different due diligence processes. The Norkom solution enables an organization to flexibly define the information requirements for each customer type at the time of account opening.

How does it work? - It triggers a display of the appropriate list of documentary evidence required before customer acceptance and enables an organization to record what information has been received (either direct or via a 3^rd party) and uses predefined workflows to issue red flags and time sensitive reminders for documents still outstanding.

Norkom employs the same data capture rules for customers delivered to the Norkom system either in electronic format (e.g. delivered from a core banking platform) or via customer information capture screens such as those dynamic screens provided within Norkom CDD solution. Using advance searching techniques interactive searches can be carried out online and in real time to check new customers against industry watch lists.

The solution works in conjunction with industry recognized databases and online Identity Verification (IDV) services to validate and verify customer information as appropriate. It holds corresponding results along side other customer information and provides a complete record of all information received, all validations performed and all actions taken complete with audit trails to satisfy the most rigorous investigations.

Norkom can transform the account opening process from an arduous and often arbitrary administration task into a clearly defined, automation driven, risk based process that minimizes customer inconvenience and maximizes staff productivity.

Assess and Monitor

Norkom’s risk based approach to customer due diligence spans the entire lifecycle of a customer relationship.

Once a customer has been accepted the real work begins - the Norkom solution continually monitors a customer’s initial risk assessment to ensure it remains valid in light of additional transactional and behavioral information observed – for example:

• Transaction monitoring – high risk customers are automatically monitored for deviations in their behavior as compared to expected and peer group behavior. Low risk customers can be exempted.
• Static information monitoring – high risk customers are automatically monitored for changes in their static information, such as change of address or country of residence, and alerts are then automatically generated for the same.
• Limitation of offering – high risk customers can automatically be restricted from high risk products or services or have limits placed on such products or service usage
• Time based re-classification – medium risk customers can automatically be scheduled for risk categorization review and alerts set up to automatically notify employees to action the same.

Norkom’s rigorous approach to risk assessment and ongoing monitoring ensures that the CDD process spans the lifecycle of the customer. The use of risk categories to drive action across the business results in a dynamic process which actively manages risk for the business.

Ongoing monitoring and alerts

Investigate

Prioritized alerts and activity reminders delivered direct to investigators desktops fully populated with all the information required.

Investigator productivity is critical to an effective compliance operation. Norkom’s CDD solution encompasses a capability rich case management module which makes the investigate process swift and simple.

How? – Whether at account opening or for on going CDD monitoring the Norkom solution uses risk categories to prioritize alerts focusing investigators on what presents the greatest risk to the business. Alerts flagging customers with incomplete information or validation are automatically delivered to investigators fully populated with details of documents outstanding and a history of actions taken.

Pre-defined workflows are embedded to clearly direct the investigator in what to do next and escalation processes are built into the system automatically notify senior management of any high risk situations. In addition the Norkom solution automatically raises alerts should customer behavior become suspicious based on their behavioral and peer group profiles. At the click of a button investigators have access to all the information they need on the customer and their transactions to ensure swift but rigorous investigation.

Norkom’s solution comes with pre-defined and configurable workflows and business processes which enable routine task to be automated enabling investigators to focus their efforts on investigation rather than administration. With the cost of compliance rising at an estimated 43% per year the ability to automate repetitive non-value adding components of the investigation process delivers real bottom line benefit to the business.

Refine

Robust analytics drive the automated re-classification of risk categories.

Nothing remains static and too often the risk categories assigned to customers can quickly become out of date and irrelevant rendering the risk based approach completely ineffective.

The Norkom solution uses sophisticated analytics to continuously analyze changes in customer behavior as well as static information.

It automatically assesses the relevance of the assigned risk category and makes system-generated recommendations, with supporting rationale, on changes that should be made. For example high risk customers where no alerts have been generated for six months may be reclassified to medium risk and automatically scheduled for review again within the next three months.

In addition as customers move risk category the solution triggers alerts and notifications to other areas of the business notifying them of the change and ensuring appropriate action is taken. For example a lower risk category may entitle the customer to additional products and services previously not available to them.

Norkom’s continual refinement of assigned risk categories enables organizations to truly execute a risk based approach to running their business. The solution creates a dynamic environment which ensures the organization is driving its efforts and resources to focus on what matters most today and not yesterday.

Risk Re-classification

Report

Norkom’s solution comes with pre-packaged reports giving you all the information you need at a click of a button.

Regulatory reports such as CTRs and SARs are generated automatically and ready for electronic or manual submission and all reports have built in workflows ensuring appropriate review and approval.

Our business reporting and analytical capabilities enable organizations to review the effectiveness of the CDD process and dashboards provide up to date information on the key metrics needed by the operation. In addition the Norkom solution provides advanced visualization capabilities enabling executives to instantly see the risk exposures and drill down to understand the underlying data.

For example at the click of a button managers can see their risk exposure by region, by customer type, by product and so forth and instantly access the information online to understand the underlying drivers. Norkom’s reporting capabilities provide the business with the information they need automatically and in a manner that eradicates the man hours wasted in manual report compilation.

Norkom’s CDD solution enables organizations to execute an efficient, repeatable and effective process to ensure due diligence in the know your customer process. In addition the solution transforms the risk based methodology in to a dynamic actionable process driving actions across the business that are truly in sync with addressing the business’s risk exposure.

The benefits are multiple:

• Clear and demonstrable regulatory compliance
• Reduced risk of exposure to sanctions
• Dynamic risk categorization bringing real focus to the business
• Increase productivity of investigative staff
• Reduced workloads