PEP search is not merely a luxury; it is a necessity as it is a legal requirement. Businesses, financial institutions, healthcare sectors, the real estate industry, and other regulated firms must conduct a PEP search using PEP screening software.Financial criminals commit organized crimes to launder money by hiding the source of funds. They exploited the financial economy for other dirty purposes like terrorist financing and corruption.
Politically exposed persons who hold or have authority due to their positions and roles are categorized as high-risk clients. Pep screening is a part of risk assessment that ensures AML/KYC compliance. Ongoing PEP search is essential throughout the business with PEPs to detect risks.
A PEP checker allows you to identify PEPs involved in crimes or linked to suspicious activities. A PEP check is a must-step in dealing with transactions of politically exposed persons.PEP screening prevents financial crimes and safeguards businesses from client loss and reputational risks.
Conducting PEP search for high-risk clients
A PEP search compares your client’s name and data with already available known PEP lists. Compliance providers offer AML software to conduct a PEP check on your clients.
A potential match in the global Pep lists tells you to investigate more, and you can make informed decisions based on results. Politically exposed persons are people who are famous due to their positions.People from different sectors, like the army, politicians, CEOs, judges, and state heads, are considered PEPs. Their family members, close friends, and business associates are also considered PEPs.They can also be involved in illegal activities like money laundering, terrorist financing, and bribery.
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Significance of PEP search through PEP screening
When a client is onboarded, PEP search is a must to meet AML requirements. Financial organizations, law firms, real estate, and fintech companies conduct ongoing PEP searches through a PEP checker. Heavy fines are imposed after failing to perform PEP checks by government and regulatory authorities. Violation of AML laws leads to damage to the reputation of your business.Clients may lose trust, and you can face financial loss too.
How is the ongoing pep search conducted?
PEP screening is a process of screening PEPs in global databases. Databases collect lists according to title, role, country, and status of PEPs. An ongoing PEP search allows you to detect risks that are updated on lists, such as if PEP has recently been involved in corruption.
Its status will be updated, and you can assign scores to PEPs according to different factors. Enhanced Due diligence is applied immediately when a PEP’s name appears on the list. When a suspicious transaction is detected, submit a suspicious activity report (SAR) to the authorities for further investigations.Keep records of all PEP-related data extracted from the PEP checker for audits.Ongoing PEP search requires an efficient PEP checker who has vital information, such as how long a PEP was appointed to their position.
What was the role of the PEP, the country where the politician resides, and the associated risk?
Associated people and relatives of PEPs, record of legal issues and financial crimes in which a PEP was involved, and negative news about them.
Advanced automated PEP Checkers
Advanced PEP screening software has incorporated databases with AI technology. This makes the result fast and accurate and reduces the risks of false positives.These checks are not time-consuming as compared to manual checks. Manual checks have false positive results, and these are a time-consuming process.Large data can be accessed easily in traditional peptide screening. Ongoing PPE search ensures that all your clients are monitored regularly.
Any change is detected immediately, while onboarding a client might not be a PEP or was not involved in illegal activities. Later, an ongoing pep search is a must.Further action can occur on time. A risk score is assigned after knowing the risks they pose.
Characteristics of an effective PEP Screening software
A risk-based approach is applied in the PEP screening process; PEP search allows you to detect risks of illegal activities.Compliance should rely on a trustworthy, reputable, and authentic compliance provider. That provider must have updated databases taht cover all the PEP lists. It should give authentic, correct, and fast results.False positive results should be reduced, and operations should be efficient.
Perform ongoing PEP search of clients, dont restrict to one-time PEP checks while onboarding.
Tailor your risks according to the type of clients (PEPs). Customize the risk level on their position or ranking and other factors. Army officers may pose more risks as they have sensitive information than politicians.Perform enhanced due diligence (EDD) accordingly and train your team to contrast different risk levels. Make them understand the importance of PEP checks and teach them how to perform a PEP search.Maintain a file of all records of PEP searches, risk assessments, transactions, and teh actions for further audits and review
