KYT Verification – A Battle To Combat Transaction Laundering


KYT (Know Your Transaction) is a process of assessing or verifying the customer’s transactions. Know your transaction is very similar to KYC which focuses on the information about customer transactions while using a risk-based approach. KYC helps deal with risk factors of due diligence allowing taking a closer look at their transactions.

The process outcomes provide us with undeniable evidence, allowing companies and institutions to follow the regulations of KYT and secure themselves against illegal crimes and activities.

  • Card transactions
  • Remittances
  • Trade finance
  • Cash transactions

Transaction laundering is associated with money laundering. Criminals outsmart the system while exploiting the use of shell companies to continue their scam activities.

KYT Implementation Using Technology

AML and KYC compliance combined with know your transaction solutions Include

1.   Blockchain Technology

This prevents fraud in banks because the data is scattered in transactions instead of collecting it in one place. This is to make sure that no one can access the data and exploit the information. Blockchain technology permits the banks to enter the data in code form to utilize the transactions.

2.   Machine Learning

Artificial intelligence combines data, information, and analytics. AI assists banks in a way that can speed up the entire process of transactions easily, speedy yet accurate.

Know Your Customer Transaction

KYC is a regulation in financial institutions and enterprises. It’s important in the customer onboarding process, but it’s not enough. It is a regulation to ensure that customers are not associated with any illegal activities such as money laundering and counter-terrorist financing. This, however, is insufficient to offer firms more in-depth information about their customers and their transactions. KYT enters the picture, allowing companies to monitor activities as well as get more information and insights into transactions processed. As a result, as banking institutions become heavily engaged with digital products, either directly as a service or as a technology platform account managers, they will need to consider learning more about blockchain transactions and money flows.

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KYT can use an analytical method to observe transactional patterns. The most efficient way to incorporate Know Your Transaction procedures with regular KYC for specific transactions is to employ a compliance software system that securely and effectively detects and analyses transactions on the blockchain.

KYT Compliance

KYC compliance, in particular, has a significant influence on how financial services organizations enable users to register accounts and execute transactions on the preferred device. Consumers want to bank online, but banks must comply with AML and KYC regulations while simultaneously combating fraud and financial crimes and minimizing high-risk transactions. To help people achieve their KYC standards, they’ll need to get a strong authentication solution that provides both simplicities for their consumers and security for their organization. Search for smartphone and web-enabled solutions that are using on-device advanced technologies, biometrics (such as face detection with activity recognition), compliant deep learning, and identification specialists to ensure precise identity results in the seamless digital environment that users and customers expect. Many companies also used document verification services to verify documents.

Fraud Transaction Monitoring

A comprehensive fraud prevention approach is built upon fraud monitoring. Ongoing fraud tracking is the technique of continuously monitoring all activity on a bank account – not only the initial login and subsequent financial transactions like payments and cash payments. Continuous fraud monitoring examines all activities and occurrences, whether monetary or non-monetary. This covers things like updating an account owner’s identity, adding beneficiaries or payees, and registering a device. An anti-fraud system must continuously evaluate huge volumes of data, activities, and their context to detect abnormalities in user behavior patterns while monitoring for suspicious activities. It is a method that enables financial companies to respond to the danger of a threat in real-time and prevent fraud.

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Continuous fraud monitoring examines and analyses data about digital banking transactions, devices, IP addresses, behavior, and all activities performed by users – as they occur – to identify the level of risk.

The anti-fraud system examines activities and events such as changing an account owner’s profile, introducing a new beneficiary or payee, and enrolling a new device as part of this ongoing monitoring. The detection and prevention system also considers the effort and the outcome, whether successful or unsuccessful. This creates a historic record for each user activity before, during, and after it occurs.

The Bottom Line

In this fast paced world, everyone will be affected by it whether they are bank managers, or different business owners. In the corprate world, high autiehs make rise to introduce the digital era of using wifi and smartphone banking, that provides a perfect and error-free experience for customers.

 KYT is becoming increasingly popular day by day to reduce that ratio of fraud and constant monitoring of customer transactions. Choose the best solution of KYC to prevent the scams so that they can’t exploit the businesses and intitutions.

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About the Author: Nicky Bella

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