Perpetual KYCpKYC

Refreshing customer records continuously instead of on a schedule.

Rather than reviewing every customer once a year whether or not anything changed, the institution updates a customer's file when something happens that changes their risk.

Event-driven KYC refresh triggered by risk changes rather than fixed periodic review cycles. A periodic cycle reviews customers on a calendar, such as every year for high-risk customers and less often for lower-risk ones.

Perpetual KYC (pKYC) works by watching for trigger events:

• Screening hits, such as a customer who newly matches a sanctions or politically exposed person list.
• Unusual activity, such as transactions that depart from the customer's profile.
• Changes in the customer, such as a new address, a change in ownership, or a new business activity.
• Document events, such as an ID that is about to expire.

A pKYC process typically works like this:

1. Systems monitor customer data and activity continuously.
2. A trigger event fires.
3. The institution refreshes the part of the file that the event affects, and may re-verify the customer.
4. It updates the risk rating and records what changed.

Perpetual KYC sits next to terms that are easy to mix up:

• Ongoing monitoring is the continuing watch that produces the triggers.
• Re-verification is re-checking a customer's identity, which a trigger can start.
• Customer due diligence (CDD) is the risk assessment that the refresh keeps current.