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AML compliance in the Philippines requires a bespoke KYC solution

For this article, we will be discussing anti-money laundering (AML) compliance for organisations in the local regulated sector, as well as what makes the Philippines somewhat unique in this regard. We will also have a look at what is required from an effective onboarding and ‘know your customer’ (KYC) solution to overcome the challenges of the region’s unique situation to meet local regulatory compliance.

A Brief History on AML

A Brief Overview

The Asia-Pacific (APAC) region has emerged as a hotspot for fintech innovation with several countries, including the Philippines, considered prime business destinations. With the Philippines’ status and influence as a business and fintech hub within this region, the country is attracting business interest and investment from around the world.

Unfortunately, with this status also comes the risk of attracting the attention of those who are looking to exploit the circumstances to launder money and commit other forms of financial crimes and corruption. This threat has led the government to develop and bolster their efforts for combating the financing of terrorism (CFT) and AML regulatory frameworks.

Although the country’s Securities and Exchange Commission (SEC) and the Central Bank of the Philippines (BSP) act as the primary financial regulators, the Anti-Money Laundering Council (AMLC) is the dedicated AML authority tasked with implementing the country’s main AML legislation: Republic Act No. 9160, The Anti-Money Laundering Act (AMLA) of 2001.

Now that we have provided you with a brief background, let’s discuss some of the requirements of this legislation and a few of the challenges that may arise due to its necessities.

Know Your Customer

Effective KYC procedures involve ID verification during the onboarding process, while also providing continuous screening and monitoring

As a local, you may not realise that other countries around the world do not have such an extensive list of valid government-issued forms of identification as the Philippines does. Despite the optimistic goal for National Identification System (PhilSys) to register the whole population by 2022, initial delays in the widespread adoption of the system and its benefits may result in a couple of years passing before being considered an effective solution. In the meantime, the current system is still functional.

AML in the Philippines requires obligated institutions to verify their customers’ identities and ensure they are being truthful about the nature of their business. This means that institutions should implement suitable customer due diligence (CDD) measures with additional enhanced due diligence (EDD) measures for customers that present a higher level of AML/CFT risk.

What this means is that not only do institutions have to verify customers’ names and personal details, but also screen customers and their transactions against international sanctions lists and watchlists to ensure that they are not involved in terrorism or connected to terrorist organisations. Additionally, this screening process should be conducted on an ongoing basis to ensure that institutions respond to changes in their customers’ risk profiles, including the status for a politically exposed person (PEP) and their involvement in adverse media stories.

Organisations should screen their customers against the sanctions list circulated by the BSP and the AMLC, along with lists issued by international authorities such as the Office of Foreign Assets Control (OFAC) and the United Nations (UN).

The last topic that should be taken into consideration is the Republic Act No.10173, also referred to as the Data Privacy Act. The legislation applies to all private, personal or otherwise sensitive data of natural and juridical persons in the Philippines. The Act sets out rules for the collection, processing and sharing of data, and requires organisations to obtain consent when doing so. The Act also includes a definition of the personal and sensitive data that is covered by its provisions.

Complying with The Philippine’s AML regulations involves significant administrative effort when done manually, especially for the continuous screening processes. The complexity of regulations can also increase costs and reduce efficiency, while human errors can hamper the process further, and even lead to compliance penalties.

Sybrin Can Help

The Sybrin Intelligent KYC and AML offering is a complete solution for onboarding customers, automating cognitive KYC procedures, and performing client and enhanced due diligence investigations to prevent fraud and ensure regulatory compliance.
Our solution provides a seamless onboarding experience by capturing all ID-related information with the help of our IDP functionality.

Real-Time Sanction, Watchlists, and PEP Screening, as well as Continuous Monitoring

What is IDP?

Intelligent Document Processing (IDP) makes the repetitive and labour-intensive task of manual data capturing and entry much simpler by harnessing technologies such as AI and machine learning to understand and turn unstructured and semi-structured data into a structured format which can be augmented by humans if needed.

What sets our solution apart is that, through the use of computer vision, our native and optical character recognition (OCR) extraction is powered by deep learning OCR, which means it is not just another OCR or text extraction tool. Together with a human feedback mechanism, our neural networks allow us to get the most accurate reads and ensure that our system gets better and better over time as it learns.

Our natural language processing (NLP) algorithms help automate any business process which involves the processing of natural language data such as emails, chats, complex documents, and legal contracts, while our predictive, text, and behavioural analytics derives high-quality information from any text format.

Pair this functionality with our other features, and you’ve got one very efficient KYC and AML solution. Let’s have a look at some of these features in more detail:

Real-Time Sanction, Watchlists, and PEP Screening, as well as Continuous Monitoring

ID Capturing and Digital Onboarding

Our seamless, real-time ID capture product enables the rapid ID capture, data extraction, and validation of all primary IDs in the Philippines while our frictionless and fast AI-powered onboarding solution enables you to verify and onboard both businesses and consumers digitally. This involves a very effective automated process that leverages machine learning, AI, liveness detection, as well as facial and other biometrics to verify an identity by matching a user’s live selfie with the photo shown on their government-issued ID. Other features include verifying residential addresses using geolocation or utility bills, and the viewing and signing of the KYC declaration form for consent to comply with the above-mentioned Data Privacy Act.

Real-Time Sanction, Watchlists, and PEP Screening, as well as Continuous Monitoring

Sanction, Watchlists, and PEP Screening, as well as Continuous Monitoring

Not only does our solution offer real-time matching and monitoring against national and international lists, it also incorporates intelligent fuzzy matching algorithms designed to create fewer false positives. It also allows you to define your own real-time monitoring schedules as well as the capability to create your own ‘black and white’ lists.

Our real-time PEP screening uses machine learning and offers global coverage for automated tracking of entities based on their risk, formulated from predefined risk rating modules while also providing adverse media screening.

Real-Time Sanction, Watchlists, and PEP Screening, as well as Continuous Monitoring

Case Management

Our solution offers you the ability to set predefined investigation workflows for CDD and EDD so that you will always have the information on hand when the need arises. Easily consolidate customer information, documents, comments, and findings into a case while enjoying single, integrated, holistic KYC views through dashboards and reports from the management cockpit.

Use Cases

Other than compliance to AML policies in the regulated sector, our Onboarding and KYC solution has an extensive list of uses that can apply to many other sectors in the Philippines, some of these include:


Online food ordering and retail (eliminate false ordering)

Improving driver’s licence and social security application processes

Provincial governments’ ease-of-doing-business programmes

Healthcare, including COVID-19-related tracking and symptoms

Travel, tourism, and hospitality

Vehicle hire

Plant hire

Policing

Human resources

Find out how Sybrin can help you with compliance, onboarding, and any other KYC-related requirements. Visit apex.sybrin.com/kyc-and-aml

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