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Level 3

Relevance

Accelerate Risk Assessment & Regulatory and Financial Crime Prevention adherence with Edifice CRMS Seamless Onboarding

Know Your Customer (KYC) and Know Your Business (KYB) protocols are critical for verifying identities, mitigating risks, and ensuring regulatory compliance. Edifice empowers organizations to automate and optimize these processes, reducing operational friction while unlocking enhanced security and efficiency.
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CRMS for your industry

Mitigate Financial Crime
Regulatory Compliance

Level 3 Relevance: Ongoing Monitoring
Onboarded Counterparties and Third Parties (Sub-Tenants)

  • Tenant
  • Sub-Tenancy: Customer and Third-Party
  • EDD & Frequency of Repository Data

Level 3 Relevance Service: This process ensures compliance with international and local regulatory requirements, including FAFT international standards, country risk assessments, HKMA directives, and JFIU guidelines.

A thorough compliance framework that combines automated efficiency (Level 1) with human expertise (Level 2) and focused training to proactively mitigate risk.

Our framework ensures scalable monitoring (Level 1), informed decision-making (Level 2), and proficient readiness while also ensuring compliance, preventing financial crime, and upholding integrity across all relationships.

  • Illustrative Purposes Only: As there are other scenarios within different industry practices

Level 3 Relevance: focuses on monitoring counterparties that have a direct business relationship as sub-tenants.

  • AI-driven triggers alert for material changes in sub-tenant records.
  • Automated updates reflecting regulatory changes and cross-referencing tenant records.
  • Flagging inconsistencies for compliance Level 2 review.
  • Identifying complex laundering tactics through ongoing risk evaluation.
  • Revisiting sub-tenant records for anomalies.
  • Internal notification and communication with sub-tenants regarding material changes.
  • Pre-approval and regulatory review upon significant tenancy modifications.
  • Protocols for submitting Suspicious Activity Reports (SARs).
  • Regular updates on AML/CFT regulations, emerging threats, and procedural enhancements.
  • Ensuring compliance with FAFT international standards, country-specific risk factors, HKMA, JFIU, and financial crime mitigation measures.
  • Pre-Business Relationship Record Retention:
    • Collection and storage of due diligence documentation before onboarding.
    • Retention of risk assessment reports and background verification results.
    • Secure storage of initial compliance checks and approval records.
  • During Business Relationship:
    • Continuous documentation updates to reflect material changes in sub-tenant records.
    • Ongoing retention of transaction monitoring data and internal communication logs.
    • Secure archiving of compliance assessments, SARs, and regulatory submissions.
  • Post-Business Relationship Termination:
    • Retention of sub-tenancy records for the legally mandated period post-termination.
    • Secure storage of final audit reports and offboarding compliance documentation.
    • Systematic data disposal and archiving processes to ensure regulatory adherence.
  • Continuous education for personnel involved in AML-CFT monitoring.
  • Periodic workshops, seminars, and case studies on evolving financial crime trends.
  • Interactive training sessions focusing on identifying red flags and reporting obligations.
  • E-learning modules and knowledge assessments to ensure awareness of compliance.
  • Collaboration with regulatory bodies for up-to-date compliance training and best practices.

Level 3 Relevance: focuses on monitoring third-party sub-tenants that do not have a direct business relationship but are indirectly associated.

  • AI-driven alerts for updates in third-party sub-tenant records.
  • Automated compliance checks against evolving regulations.
  • Risk-based flagging of irregularities for Level 2 review.
  • Enhanced due diligence on third-party sub-tenants.
  • Review and reassessment of third-party records upon material changes.
  • Internal notifications and required updates for sub-tenants.
  • Pre-approval mechanisms to ensure adherence to AML-CFT protocols.
  • SARs submission procedures as per regulatory guidelines.
  • Periodic training and updates on AML-CFT changes.
  • Continuous refinement of monitoring strategies to detect evolving methods of financial crime.
  • Alignments with FAFT international standards, country-specific risk assessments, HKMA, JFIU, and financial crime mitigation strategies.
  • Pre-Business Relationship Record Retention:
    • Documentation of third-party onboarding risk assessments.
    • Verification of sub-tenant compliance history and due diligence records.
    • Secure archiving of background checks and approval documentation.
  • During Business Relationship:
    • Ongoing storage of transaction monitoring data and risk re-evaluations.
    • Continuous updates to sub-tenant records reflecting regulatory changes.
    • Secure retention of compliance communications and flagged risk assessments.
  • Post-Business Relationship Termination:
    • Retention of records for the legally required period post-termination.
    • Secure archiving of exit audits and compliance closure reports.
    • Controlled disposal procedures ensuring confidentiality and regulatory compliance.
  • Regular skill enhancement programs for compliance officers and monitoring teams.
  • Role-specific training covering investigative techniques and risk profiling.
  • Scenario-based learning for identifying suspicious activity and regulatory compliance challenges.
  • Industry collaboration to adopt best practices from leading financial institutions.
  • Certification programs and refresher courses to maintain high standards of AML-CFT expertise.

Both direct and indirect relationships require structured AML-CFT monitoring to mitigate financial crime risks.

The integration of Level 1 automated systems and Level 2 investigative risk assessments ensures regulatory compliance, enhances proactive threat detection, and optimises record retention practices in line with international and jurisdictional requirements.

Case Study
Integration
Prospective
Relevance
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CASE STUDY (The Caribbean)

Everything you do at the poker table conveys information “Unpredictability”.

Identify the risk FINDINGS:

High-Risk unintended consequences

  • A director of a trust company business operating in Country X was approached to set up a discretionary trust by a solicitor in Country Y.
  • The solicitor advised Individual A, was acting on behalf of Individual B.
  • Individual A had received monies from the sale of a cash-intensive business, which was owned by Individual B.

Assess the level of risk CONTAINMENT:

  • The solicitor wished to hold the sale proceeds through an offshore trust. The solicitor sent through documents to identify Individual A, but none in relation to the ultimate client Individual B.
  • A few days later, over USD$500,000 was sent from the solicitor’s account to the trust company’s client account.
  • The trust was established with Individual A as the sole beneficiary and made the four payments as requested.

Understand the impact of the risk ROOT CAUSE

  • The High Court of Country X found both the trust company and the director of the trust company guilty of failing to comply with client identification requirements of the AML law, a decision which was upheld by the Court of Appeal.
  • It was held that Client identification procedures prescribed by the AML law must be kept up and that a single breach, provided that it was more than a mere oversight, is sufficient to constitute an offence.

Moving forward with confidence

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