Over the last ten years, financial institutions worldwide, spanning the U.S., Europe, APAC, and the Middle East, have faced a staggering $26 billion in penalties. These fines were meted out for lapses in anti-money laundering (AML) protocols, failing to adhere to “Know Your Customer” (KYC) standards, and other sanctions-related infringements. In this intensified regulatory landscape, it’s imperative for organizations to prioritize risk management and ensure thorough Customer Due Diligence (CDD).

It’s not just about realizing profits anymore; it’s about comprehensive KYC processes, understanding the intricacies of each customer relationship, and seamlessly integrating these practices to remain compliant. As we navigate this challenging terrain, the essence of robust risk management lies in the diligent execution of AML, KYC, and CDD procedures, ensuring organizations are consistently transacting with verified and trustworthy partners.

What Is “Know Your Customer” (KYC)?

“Know Your Customer” (KYC) is a crucial regulatory and compliance process that financial institutions and businesses implement to verify the identities of their customers. The essence of KYC lies in its ability to mitigate risks, ensuring that organizations do not inadvertently engage in transactions with entities or individuals involved in money laundering, fraud, or other illicit activities. The recent Hindenburg research report in March 2023 sheds light on the pressing need for rigorous KYC processes. The report unveiled concerning discrepancies in Block Inc’s user count, suggesting a significant overestimation of legitimate users. The ensuing revelations led to a staggering 22% plummet in Block Inc’s share value, sounding alarm bells across the financial spectrum.

Block Inc, previously recognized as “Square,” is a prominent player in the global financial sector, offering a range of commerce tools and solutions such as Cash App and Afterpay, tailored to bolster business growth. The company faced severe criticism when Hindenburg’s report unveiled that a troubling 40% to 75% of Block’s accounts were either fraudulent, held by fictitious entities, or had multiple accounts tethered to a singular individual.

This report’s aftermath has underscored the importance of KYC in today’s digital age. Although KYC regulations predominantly mandate banks and financial institutions to authenticate customer identities, especially when opening new accounts or availing financial services, the recent fiasco points to its broader significance.

KYC protocols not only help in ensuring compliance but also act as a bulwark against potential financial misconduct. With the rising challenges, many institutions, spanning banking to fintech, are pivoting towards innovative KYC solutions, integrating cutting-edge technologies like biometrics and AI, to enhance accuracy and efficiency in customer identity verification.

The Cost of Ignoring KYC Compliance: A Case Study on ING’s $900 Million Penalty

In September 2018, ING, a well-known bank from the Netherlands, faced a staggering $900 million fine. Why? They didn’t follow the rules meant to stop illegal money activities like money laundering. The Dutch authorities found out that between 2010 and 2016, ING’s operations in the Netherlands fell short of doing the necessary checks and didn’t report shady transactions as they were supposed to.

This event sent shockwaves through the banking world and prompted major European agencies, including the European Central Bank and the European Commission, to take immediate action. They even shared a private document with lawmakers across Europe, highlighting the urgent need to tighten the rules about money laundering and customer verification. The document set a four-month deadline for banks across Europe to up their game in stopping financial crimes.

So, here’s the big question: Can banks do a better job at stopping illegal activities like money laundering, without making life difficult for honest customers? Banks want to make it easy for you to use their services while also keeping out the bad guys. Is there a way to have the best of both worlds?


How Businesses Can Achieve Know Your Customer (KYC) Compliance?

In a dynamic business landscape, ensuring KYC compliance is more than a regulatory mandate; it’s a safeguard against potential threats. Here’s how businesses can efficiently adhere to KYC guidelines:

Embrace Automation in Onboarding:

Implement automated identity verification systems during the customer onboarding phase. Not only does it streamline the process, but it also offers more precise checks compared to manual reviews. For instance, according to a report by McKinsey & Company, automation in financial services can reduce the onboarding time by up to 70%. As James Rickards, financial commentator, stated, “Automation is the future of banking and KYC procedures.”

Multiple ID Checks:

It’s crucial to ask clients, especially high-value ones, to provide multiple forms of identification during the initial onboarding process. Rotating the request for specific IDs randomly can further bolster the verification process.

Regular and Random Checks:

Just the initial verification isn’t enough. To ensure continued compliance, businesses should conduct spontaneous identity checks periodically throughout the duration of client accounts. Deloitte’s 2018 report on banking underlined the necessity for ongoing due diligence, stating, “Continuous customer monitoring is not a luxury but a necessity.”

Stay Alert with PEPs:

If a potential client or business partner matches as a Politically Exposed Person (PEP), businesses should assign a higher risk score. This measure ensures heightened scrutiny during both the onboarding process and the subsequent relationship.

Utilize Advanced Technology:

Adopting technology that evaluates the risk associated with devices used to access financial systems is a boon. Such systems can predict the likelihood of fraud, especially in scenarios like account takeovers, adding an extra layer of security. The Financial Action Task Force (FATF) stresses on the importance of technological innovation to counteract money laundering risks. In their words, “Technology is not just a tool for fraudsters but a weapon for financial institutions.”

In-Person Onboarding for High-Value Clients:

Personal interactions with high-value clients, whenever possible, add an irreplaceable human touch to the due diligence process. A sentiment echoed by Brian Krebs, a cybersecurity expert, “In the digital age, a personal touch isn’t just preference but a shield against sophisticated cyber threats.”

CRI™ Provides Robust KYC and Compliance Solutions for Businesses

In an era where due diligence is paramount, CRI™ emerges as a trailblazer, providing robust Know Your Customer (KYC) and compliance solutions tailored for today’s businesses. Since its inception in 1990, Corporate Research and Investigations Limited, or CRI™, has been the gold standard in safeguarding businesses from potential threats and vulnerabilities. With a dedicated team of over 50 full-time analysts stationed across the globe, from Europe to Asia and the Americas, CRI™ brings localized insights paired with international expertise.

The company’s vast suite of solutions spans from meticulous due diligence, background screenings, and third-party risk management to advanced business intelligence & compliance systems. The dedication to excellence is further underscored by CRI™ having one of the world’s most seasoned and well-trained integrity due diligence teams. As regulations tighten and businesses seek to ensure they are working with trustworthy entities, CRI™ stands as a beacon of reliability, ensuring that every partnership and transaction aligns with global compliance standards.

CRI Group™ due-diligence service


Due diligence is an essential step in confirming the legitimacy and reducing the risks of any professional relationship. CRI Group™’s DueDiligence360™ reports offer unparalleled insight into potential business partners, serving as a robust risk management tool for making sound decisions regarding mergers, acquisitions, and strategic partnerships. The thoroughness of CRI™’s due diligence process ensures that your organization’s strategic and financial goals are in line with the entities you choose to partner with.

Utilizing such comprehensive reports can help you comply with stringent anti-money laundering, anti-bribery, and corruption regulations. Whether you are onboarding a new vendor or considering a joint venture, understanding beneficial ownership structures through DueDiligence360™ reports can significantly enhance your compliance and decision-making processes.


In an era where fraudulent activities have grown more sophisticated and frequent, businesses face increased risks that can disrupt their operations and tarnish their reputation. CRI Group™ stands as a beacon of security against such threats, deploying pioneering fraud risk investigation methods to protect enterprises globally. Our commitment lies in identifying and actively preventing potential fraud before it can harm businesses.

Internally, a business’s strength is gauged by its controls and governance. CRI Group™ has meticulously developed preventive measures that have enabled organizations across the globe to pinpoint material weaknesses in their internal controls. Such unidentified weaknesses can lead to collusive activities, thereby skyrocketing the liabilities stemming from corporate fraud. By bringing these vulnerabilities to light, CRI™ ensures companies can bolster their defenses and safeguard their assets.

CRI Group™ prides itself on its international team of Certified Fraud Examiners (CFEs). This elite group of professionals dives deep into the fabric of companies to dissect and evaluate their fraud prevention measures. We collaborate with organizations, helping them sculpt robust risk management programs that stand resilient against fraudulent incursions. But our expertise doesn’t stop there.

CRI™’s CFEs also provide tailored training for every company tier, from the boardroom to the management and staff, cultivating an ecosystem where awareness and vigilance against fraud become second nature. We also design communication strategies, ensuring that if an employee observes suspicious behaviour, they have a clear and secure channel to report it. Furthermore, CRI™ ensures that corrective actions and investigative policies don’t just patch problems but also align seamlessly with regulatory and compliance requisites.


The challenges presented by Know Your Customer (KYC) regulations are particularly pressing for businesses, especially in sectors like finance. The fallout from lapses in this area can be devastating, both from regulatory repercussions and the potential for fraud. CRI Group™ provides exhaustive KYC services, from identity verifications to transaction monitoring, ensuring that businesses are protected from fraud. This approach is complemented by a keen emphasis on staying abreast of and compliant with the latest local and international regulations.

Recognizing these multifaceted challenges, CRI Group™ offers a suite of services that holistically address both security and resilience. Starting with the digital domain, businesses are constantly under the looming threat of cyber-attacks. CRI Group™ provides rigorous assessments of IT infrastructures, hunting for vulnerabilities and then tailoring solutions specific to the organization’s unique digital landscape. On the physical side of things, a comprehensive evaluation of locations and assets ensures protection against potential threats, from theft and sabotage to natural disasters.

But what if the unexpected occurs? Preparedness is key. CRI Group™ assists businesses in establishing stringent controls, tailored to their specific challenges, ensuring unauthorized access and potential security breaches are kept at bay.

Bottom Line

KYC compliance is a complex yet essential aspect of risk management for businesses and financial institutions. Using automation, advanced technology, comprehensive due diligence processes, and leveraging specialized services like those offered by CRI™ can greatly enhance an organization’s ability to achieve and maintain KYC compliance.

Corporate Research and Investigations Limited (CRI™) offers businesses robust KYC and compliance solutions, including due diligence, background screenings, risk management, and fraud investigations. Contact us to explore how we can assist your organization in achieving robust KYC compliance and enhancing overall risk management strategies.