With the constant changes and advancements in technologies and regulatory updates, it is not enough to finish the KYC procedures to ensure your business is in great health. Often, completing the KYC (Know Your Customer) while onboarding a new customer as a part of ensuring due diligence isn’t enough. Gone are the days when you could complete the KYC and forget about precautionary measures. It is important to have a constant high-value payment monitoring system in place to ensure your exposure to high risks is minimal.
Several businesses are exposed to high risks due to the nature of their activities. For example, financial institutions and dealers in precious metals often undertake high-value financial transactions involving individuals and entities across the globe. Chances are they could be politically exposed or sanctioned, thereby increasing the risk of exposure. Fund transfers and invoices might be used to carry out illegal activities, disguise sources of funds and launder money. Moreover, the customer profiles and business activities are likely to change over time. Hence, a one-off KYC is not the best solution, but an ongoing high value payment monitoring system.
What is a High-Value Transaction?
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There are several ways to define a high-value transaction. One way is to use the median of all your transactions as the base and consider any number above it as a high value. Another way is to use the 75th percentile of all your transactions to determine high-value payments.
A high-value transaction can include the following:
- High-risk transactions— all those transactions with a high risk of fraud
- Huge cash transactions— all the transactions where the cash payments are higher
- Transactions with substantial financial impact—considerably affect the overall finance
High-value payment monitoring
- Protects your business from fraud
- Spots inconsistencies in your financial records
- Notifies you of any suspicious transactions as they occur
- Makes sure payments are made to the right accounts
- Improves overall cash flow and prevents financial losses
Benefits of High-Value Payment Monitoring
Ongoing high-value monitoring makes sure that business activities are current and consistent with the risk assessment. Apart from this, constant monitoring offers many advantages. Some of the advantages are:
- Identification of potential risks affecting the financial health and reputation of business
- Provide information on any adverse media or additions to a watch list on a daily/weekly/quarterly basis
- Prevention of business risks arising from escalation, thereby averting any financial losses in high-risk markets
- Prioritise high-risk customers and change the risk levels as per the issues identified through automated monitoring
- Have a broad idea of the risk you are exposed to from your data-driven decision
- Quick and cost-effective monitoring by eliminating manual and outdated processes
- Add flexibility to your compliance through periodical updates of names/businesses to be monitored
- Any unusual activity is instantly noticed and flagged so that the decision-makers can take quick decisions to eliminate or minimise the risks
- Round the clock monitoring of digital wallets and ecommerce businesses to ensure everything is above board and not risky
These days, it is easy to monitor high-value payments, thanks to a wide range of automated suites of specifically designed tools. Most businesses are now investing in high value payment monitoring software as they offer a unified experience for customers and stakeholders. Furthermore, it makes sure there is better protection from fraud and financial losses by streamlining all the transactions. Above all, with the right software, everything will be available in one place and within a few clicks.
