KYC/AML for smaller digital banks?

asked by u/wati51 · 9d · 4 answers

Been looking into setting up a new corporate account for a small venture, nothing complex. A few of these newer digital-first banks, particularly those based in less regulated jurisdictions, seem to have surprisingly quick onboarding and less stringent KYC/AML checks than the tier-1 institutions. Is this just an illusion, or is there genuinely a different threshold applied for smaller accounts/entities that makes them a viable, quicker option without running into compliance issues down the line?

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Top answers

  • u/jasmine_p· 5 pts· 9d

    It's an illusion. Lower initial friction doesn't mean less scrutiny later; they often just front-load less and do deeper dives once transaction volumes pick up. The regulations still apply, even if they appear to shortcut the initial process.

  • u/ayesha_siddiqui· 2 pts· 9d

    That's really interesting! I've noticed something similar when looking at some newer fintech solutions. Do you think it's more about the size of the venture, or perhaps the type of transactions they're expecting?

  • u/olenastoica· 1 pts· 9d

    That's an interesting point. I've noticed that too, especially with some of the fintechs that seem to operate in a bit of a gray area. Do you think they might just be outsourcing a lot of that due diligence, or could it be that regulators are slower to catch up with their models?

  • u/kabir6· -2 pts· 9d

    It's likely an illusion for the most part. They might be quicker on initial checks, but once transaction volume picks up, expect to get hit with the same scrutiny, if not more, to compensate for their initial laxity. Regulators catch up eventually.

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