The FATF Recommendations are a set of 40 recommendations that countries are encouraged to implement in order to meet these standards. The FATF Recommendations cover a wide range of topics, including customer due diligence, suspicious activity reporting, and the financing of terrorism. They are designed to help countries identify and prevent financial crimes, and to protect the integrity of the financial system.
The FATF Recommendations are updated on a regular basis to reflect changes in the global financial landscape. The most recent update was in 2023.
Which ones are most applicable to user onboarding & KYC
The body sets standards to promote effective legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
FATF's recommendations related to Know Your Customer (KYC) procedures are primarily found in Recommendations 10, 11, 12, and 15, which focus on Customer Due Diligence (CDD), record keeping, politically exposed persons (PEPs), and new technologies respectively.
- Recommendation 10 (Customer Due Diligence): This requires financial institutions to identify and verify the identity of their customers, understand the nature of their business, and conduct ongoing due diligence on the business relationship. It includes identifying the beneficial owners of companies and trusts and taking additional measures for high-risk situations.
- Recommendation 11 (Record Keeping): This recommendation requires financial institutions to maintain all necessary records on transactions, both domestic and international, for at least five years. This includes records obtained through CDD measures, account files, business correspondence, and results of any analysis undertaken.
- Recommendation 12 (Politically Exposed Persons): Financial institutions should take additional measures to manage risks associated with PEPs, individuals who are or have been entrusted with prominent public functions. This involves other due diligence, including senior management approval for establishing business relationships with such persons, taking reasonable measures to verify the source of wealth and funds, and conducting enhanced ongoing monitoring.
- Recommendation 15 (New Technologies): This recommendation requires financial institutions to identify and assess the money laundering or terrorist financing risks that may arise concerning developing new products, business practices, or technologies. They should take appropriate measures to manage and mitigate those risks.
These recommendations provide a broad framework for KYC procedures, and individual countries may implement more specific regulations based on these recommendations.
Automated KYC and AML
Togggle is a decentralized KYC solution that helps businesses comply with the FATF Recommendations. Togggle uses decentralized technology to automate the KYC process, making it more efficient and cost-effective for businesses.
Togggle's automated KYC solution provides businesses with a number of benefits, including:
- Reduced risk of fraud and money laundering
- Increased compliance with regulations
- Improved customer experience
- Reduced costs
Togggle's AML Check is a powerful tool that helps businesses identify and investigate potential AML risks. AML Check uses a variety of data sources to provide businesses with a comprehensive view of a customer's digital footprint.
AML Check can help businesses to:
- Identify potential high-risk customers
- Investigate suspicious activity
- Comply with AML regulations
Togggle's 1-click KYC is a convenient way for businesses to onboard new customers. With 1-click KYC, businesses can verify a customer's identity and collect the necessary documentation in just a few clicks.
1-click KYC is a great way for businesses to improve the customer experience and reduce the time it takes to onboard new customers.
The FATF Recommendations are an important tool for combating money laundering and terrorist financing. Togggle's automated KYC and AML solutions can help businesses to comply with the FATF Recommendations and to reduce the risk of fraud and financial crime.
If you are looking for a way to improve your business's compliance with the FATF Recommendations, then Togggle is a great option. Togggle's automated KYC and AML solutions are easy to use and they can help you to reduce your risk of fraud and financial crime.