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BNM has issued a new policy document that permits MSBs to onboard customers remotely in the corporate sector.
The Central Bank of Malaysia, also known as Bank Negara Malaysia (BNM), recently published a new policy document permitting Money Service Businesses to use non-face-to-face verification processes while onboarding new clients.
E-KYC verification procedures were introduced for individual remittance customers in 2017, while the scope of e-KYC was expanded to money-changing businesses in 2019.
E-KYC verification processes are implemented by money service businesses to ensure compliance with AML/CFT regulations and to safeguard the safety and integrity of money services. BNM’s policy document sets out the minimum requirements that licensed MSBs must fulfil during remote customer onboarding.
The document states that Money Service Businesses must first obtain approval from their Board of Directors and Central Bank of Malaysia prior to the implementation of e-KYC verification in corporate customer onboarding.
It also states that corporations need to ensure proper identification and verification procedures of customer identities on a continuing basis in a remote setting in the same way as implemented during in-person verification. Money laundering risks and suspicious transaction reports must also be filed to prevent ML/CFT activities.
MSBs must also implement at least one additional verification method on top of the mandatory verification procedure, BNM says. Video calls to the customers must be made to ensure they are actually who they claim to be, requiring them to show proof of their business. However, an unannounced introductory phone call must be made prior to the video call.
During the video call, MSBs may request the person to show proof of business existence. This can include the use of consent notes or inventories.
“Reporting institutions must ensure the systems and technologies developed and used for the purpose of establishing business relationships using non-face-to-face channels (including verification of identification documents) have capabilities to support an effective AML/CFT compliance programme,” the document says.
BNM adds that the companies that fail to comply with the new rules will be facing appropriate enforcement action, including licence suspension or direct action against MSB directors, managerial staff, and other employees.
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