October 9, 2023
5 min read

Cost-Benefit Analysis: Perpetual KYC & Risk Monitoring

Assessing the Value: Perpetual KYC vs. Periodic Risk Checks

These days businesses are constantly seeking ways to enhance their compliance efforts and reduce the risk of fraud, money laundering, and other illicit activities. One of the most critical aspects of compliance is ensuring that businesses have accurate and up-to-date customer information. This has led to the emergence of two primary approaches to customer due diligence: Perpetual KYC (pKYC) and Periodic Risk Monitoring. In this blog post, we will evaluate the cost-benefit of these two strategies and explore how Togggle, a decentralized KYC solution, can help businesses optimise their compliance processes.

What is Perpetual KYC: Perpetual KYC is a continuous process of monitoring and updating customer information, allowing businesses to identify potential risks and maintain compliance with ever-changing regulatory requirements. This proactive approach enables companies to mitigate risks and respond swiftly to any potential threats, ensuring the safety and security of their customers and their business operations.

What is Periodic Risk Monitoring: On the other hand, Periodic Risk Monitoring involves reviewing customer information at specific intervals, such as annually or biennially, to ensure that businesses have accurate and up-to-date information on their customers. This approach can be more cost-effective than pKYC, as it requires fewer resources and manpower to maintain.

However, the cost-benefit analysis of Perpetual KYC and Periodic Risk Monitoring must also take into account the potential consequences of failing to identify risks in a timely manner. If a business relies solely on Periodic Risk Monitoring and fails to detect suspicious activities or changes in customer behaviour until the next scheduled review, the potential financial and reputation damage can be significant.

In contrast, businesses that adopt a Perpetual KYC approach are better positioned to identify and respond to risks as they emerge, thereby minimising the potential negative impact on their operations. This proactive approach can lead to long-term cost savings, as businesses can avoid costly fines, penalties, and reputation damage associated with compliance failures.

Weighing the Costs: Investment in Perpetual KYC Systems

To optimise the cost-benefit of Perpetual KYC and Periodic Risk Monitoring, businesses can leverage innovative solutions like Togggle, the decentralised KYC platform. Togggle offers a range of features that enable businesses to streamline their compliance processes while minimising the costs associated with manual, resource-intensive tasks.

Togggle's decentralised nature ensures that customer data remains secure and private, addressing one of the key concerns businesses face when implementing pKYC strategies. By leveraging cutting-edge technology, Togggle enables businesses to verify customer identities and maintain up-to-date information securely and efficiently.

Furthermore, Togggle's advanced analytics capabilities allow businesses to identify patterns and trends in customer behaviour, enabling them to make informed decisions about the appropriate level of monitoring required for each customer. This can help businesses strike the right balance between Perpetual KYC and Periodic Risk Monitoring, ensuring that they remain compliant while minimising the associated costs.

Automated Due Diligence

Automation is another critical aspect of optimising the cost-benefit of Perpetual KYC and Periodic Risk Monitoring. Togggle's platform offers automation features that can help businesses save time and resources by automating routine tasks, such as updating customer information and flagging suspicious activities. This enables businesses to focus their resources on higher-value activities, such as analysing customer data and developing more effective risk mitigation strategies.

Evaluating the cost-benefit of Perpetual KYC and Periodic Risk Monitoring is an essential exercise for businesses looking to optimize their compliance efforts and minimize the risk of fraud, money laundering, and other illicit activities. By leveraging innovative solutions like Togggle and adopting a data-driven, risk-based approach to customer due diligence, businesses can strike the right balance between proactive monitoring and cost-effectiveness, ensuring the long-term success of their compliance strategies.

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