Money laundering refers to hiding the illegal or illicit source or destination of money. To remove the stain of illegality, money launderers – who may include terrorist groups, drug cartels or tax evaders– use false accounting and phony or shell corporations, among other techniques, to transfer money. Such funds often find their ways to banks and other financial institutions through transactions of the purportedly legitimate customer or enterprise. To combat money laundering and the underlying crimes, federal law requires banks to collect and maintain detailed information on customers. In some places, these regulations have the moniker of “know your customer.” (Know Your Customer) analysts help financial institutions follow these rules.
What Does a KYC Analyst Do?
KYC analysts assist banks and other financial institutions in knowing their customers through research, organizing information on the customers and alerting other officers in the institution to questionable or illegal activity by customers. To fulfill the duties, the KYC analyst must know and keep current with anti-money laundering and KYC laws and the activities of customers.
KYC Analyst Job Description for Resume — Responsibilities
- Verify that financial institution has name, date of birth (individual account holders), address and an identification number for each account holder
- Obtain or oversee acquisition of identity of beneficial owners of entities holding accounts
- Rate risk level of account holders based on factors such as geography, nature of business, reliance of entity on cash transactions, products and services used and source of funds
- Retrieve supplemental information about customers as required by law
- Classify customers as “Politically Exposed Persons” based on regulatory criteria and guidelines
- Examine information concerning foreign individuals or entities opening or maintaining accounts
- Research on periodic basis activities of customers, using the public domain, services
- Update information on ownership of institutional or organizational customers
- Track “Know-Your Customer” files and deposits, withdrawals and other customer transactions and activities
- Report suspicious activity by customers to compliance officers and other leadership in the institution
KYC Analyst Required/Essential Skills
Analytical. As the job title suggests, these professionals must be able to analyze transaction history and information about the account holder to spot potential risks or fraudulent transactions. Skills in analysis also include considering alternatives to handle customers that pose risks of being money launderers and applying legal standards to specific customers or fact scenarios.
Communication. KYC analysts need skills in clearly reporting to supervisors and compliance officers information and risks to supervisors and compliance officers. Effective communication in the KYC arena means providing specific and concise findings and recommendations on addressing problem customers and questionable transactions.
Detail-oriented. To ensure the institution’s compliance with the Bank Secrecy Act and anti-money laundering regulations, a KYC analyst must understand and seek all required customer information. Missing necessary details about customers and their activities could expose the institution to financial and legal jeopardy.
Research. The KYC analyst job description includes the ability to use database services, locate sources of public records such as state business filings offices, court records and property records; and retrieve news articles and other items in the public domain. Spreadsheets and software for recording transactions can help analysts see trends in customer behavior or financial condition.
Becoming a KYC Analyst
Generally, KYC analysts have a college education, establish a background in finance or business and become experienced with risk management and compliance. Much of the preparation for a KYC analyst position comes via training and work in related occupations.
Education and Training
A KYC analyst usually must have a bachelor’s degree. Some employers may prefer candidates with post-graduate studies. Aspiring KYC analysts major in finance or business administration. A curriculum for an analyst should incorporate business administration, accounting, financial institutions and securities, business law and computer science.
A number of certification and training opportunities can enhance the qualifications of KYC analysts. These programs explore subjects such as “politically exposed persons,” customers who present a high risk of involvement in money laundering, terrorist financing or other financial crimes; and regulatory compliance.
Through the Association of Certified Anti-Money Laundering Specialists (ACAMS), present and potential analysts take courses on “Customer Due Dilligence” and “Know Your Customer” principles and requirements. The sessions include case scenarios in which the participants must apply knowledge and practice skills of KYC analysis. Certification and recertification are provided through ACAMS. Certain universities also train and certify anti-money laundering professionals.
KYC analysts should possess a prior work history in anti-money laundering operations. This consists of performing KYC reviews on customers, investigations and processing forms and paperwork required by the Bank Secrecy Act and related laws and regulations.
Prior work in a financial institution can also afford experience helpful in qualifying as a KYC analyst. These roles may include tellers, customer service representatives and other positions involving the collection and maintenance of customer information. Those with prior work in a bank or other financial institution also have exposure to financial regulations.
Banks and other financial services providers may hire KYC analysts on a temporary or contract basis. Whether permanent or temporary, KYC analysts generally log full-time hours. Some weekend or evening work may be necessary to meet deadlines. Research and other compliance projects may have short deadlines, including at times when the institution faces a regulatory or other audit.
Hiring prospects should prove solid for those pursuing compliance careers. Financial institutions rely on KYC analysts and other compliance officials to avoid fines, lawsuits and even criminal prosecution arising from violations of banking laws and regulations.
Positions in KYC analysis may springboard occupants to other roles in compliance, such as senior analyst positions and compliance officers.
KYC analysts perform an important crime-fighting function by ensuring that financial institutions “know their customers.” The position requires attention to details, continuous research, meticulous record-keeping and the willingness and ability to promptly alert upper-level managers as to risky customers.
As banks are charged with due diligence to prevent the hiding of securities fraud, tax evasion, terrorism and other crimes and corruption, seekers of KYC analyst positions will find ample employment opportunities and experience to advance in financial institution compliance work.