Revolutionising AML strategies with NAICS codes

Revolutionising AML strategies with NAICS codes

Evaluating the business line of potential clients is a key part of Know Your Customer (KYC) procedures in commercial relationships. However, analysts often spend substantial time utilising search engines and other manual processes to establish a client’s Line of Business to assess the risk involved in onboarding records or transactions.

This manual verification can lead to organisational inefficiencies and added costs for both onboarding and anti-financial crime teams. Furthermore, it can be challenging to monitor if a customer’s Line of Business changes between periodic reviews, exposing organisations to potential risks.

Thankfully, Sigma Rating’s latest platform feature, the automated Line of Business search, offers a solution.

The RegTech company has offered several examples to help understand this further. One such case is of Las Atlantis, a casino. Determining the nature of the business at the point of onboarding, and ensuring it remains consistent over time, is crucial for robust KYC and adhering to regulatory guidance on client risk scoring.

Sigma’s automated solution is beneficial for firms in the financial services sector, such as those dealing with cannabis-related businesses. For instance, PharmaCann LLC is a cannabis business operating in Colorado. However, the nature of their business may not be apparent based solely on the name. Sigma’s platform can quickly identify PharmaCann LLC as a cannabis-related entity under the Line of Business section, which can be done in bulk during new customer onboarding or periodically.

A similar case is that of “Matter of Instinct”, a barbershop based in New York City. The automated Line of Business search by Sigma quickly reveals this and other relevant details about their business, such as their NAICS code. Transactional information combined with Line of Business can help your organisation avoid unnecessary risks.

Sigma’s Line of Business function also works efficiently for bulk uploads. This feature allows you to set up alerts for changes to Line of Business for monitored entities. By doing so, it not only eliminates manual procedures but also enhances the robustness of KYC and anti-financial crime requirements.

Thus, Sigma’s automation of Line of Business and NAICS codes detection is a game-changer for organisations. It helps them comply with KYC and AML requirements more efficiently, offering both cost-effectiveness and ease of integration into existing workflows.

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