The regulatory environment is putting increasing pressure on banks and other financial institutions, as they are compelled to focus on meeting current compliance obligations while at the same time prepare for upcoming regulatory change. In the past, it was only during the process of onboarding new clients that organizations were expected to scrutinize certain documentation under ‘Know Your Customer’ regulations. Following a series of global events however, beginning with the attacks of 9/11, and including the globalization of the banking industry and the financial crisis of 2008, this relatively relaxed approach was no longer possible. The Financial Action Task Force (FATF) was established as a G7 initiative in 1989 to develop anti-money laundering norms and standards for its subscriber countries. This organization has been the main driving force behind the wide scale adoption of a risk-based approach (RBA), which is designed to move compliance from a rigid, ‘one size fits all’ methodology to a more flexible approach. A degree of flexibility in compliance programs became increasingly necessary as regulators around the world stepped up their anti-money laundering and threat financing initiatives, as it helped to achieve a better rate of resource efficiency, with a greater proportion of resources directed to third parties considered high risk. A negative, however, was that the RBA’s flexibility also introduced a degree of uncertainty as some organizations battled with interpretation, thus increasing the complexity of compliance. At the same time, the 2012 FATF Recommendations increased the challenge of KYC compliance by changing requirements, such as the need to identify the ultimate beneficial ownership of a customer organization. While these Recommendations filter into regulations across the globe, many signatory countries are preparing for their upcoming FATF mutual evaluation, a process that assesses compliance with the Recommendations. Specifically for organizations based in these countries that will be coming under review, getting to grips with the changing regulatory demands of KYC can be very challenging. In this podcast on Next Generation KYC, James Swenson, Head of Financial Crime and Reputational Risk Managed Services at Thomson Reuters chats to Charles Haryott, Head of Proposition and Product, Client On-Boarding and KYC Solutions at Thomson Reuters, about the challenge of KYC compliance, how the increasing responsibilities are impacting on organizations, and what compliance executives can do to simplify the challenge of KYC.