Did you know that a person’s involvement in politics is an important factor to consider in risk management? A PEP, or Politically Exposed Person, refers to an individual who holds a prominent position in a public function. In addition to identity verification and financial assessments, PEP screening is just as important. PEP screening is also crucial for maintaining compliance with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations, as PEPs are considered to have a higher risk of being involved in illegal activities.
In this article, dive deeper into PEP screening, including how it works and why it is important to implement in your business.
What PEP Screening Is All About
PEP screening is a process to identify an individual’s connection to political roles and evaluate the potential risks linked to their status. The positions mentioned here include government officials, law jurisdictions, public sector leaders, and other roles with decision-making authority. This screening helps businesses detect potential exposures to financial crimes, such as money laundering and occupational fraud. As part of risk analysis, this screening process is typically required during customer onboarding and background checks.
How Important Is PEP Screening
As a step to anticipate any risks that could harm the business, PEP screening is crucial. It is always better to take action in advance than to deal with the consequences after they occur. It plays a crucial role in safeguarding businesses in various ways:
- Identify high-risk individuals
- Prevention of unlawful actions
- Mitigating financial and reputational risks
- Early detection of potential risks
- Ensures business regulatory compliance
How PEP Screening Works
To conduct effective PEP screening, the process typically involves the following steps:
- Data Collection
This process begins with gathering personal information, which can be obtained from ID cards and other supporting identification documents.
- Data Verification
The collected personal data is then verified against reliable PEP databases and sanction lists. If the name is found on the list, the individual will be further assessed through enhanced due diligence.
- Enhanced Due Diligence
This process is carried out after identifying the individual as high risk. It involves a deeper inspection of various related aspects, such as their source of funds, transaction activities, and potential suspicious activities.
- Ongoing Monitoring
This process doesn’t stop after a single check. Continuous monitoring is necessary to track financial patterns and update the risk profile over time.
Strengthen your business risk protection with thorough customer verification, including PEP screening
Implementing multiple customer checks during the initial stages helps identify potential fraud and reduces the likelihood of financial or legal problems in the future. Fintelite offers a document verification solution, enhanced with fraud detection. From identity verification and PEP screening to detecting document fraud, financial analysis, and collateral data verification. Ensure all customer information are valid and safe from fraud or high risks. Our customer verification also helps you conduct thorough checks more efficiently and securely, as our API is built with trusted databases and can be integrated flexibly. Contact us to learn more about how Fintelite can assist with your document fraud detection.
