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State Street

Enhanced Due Diligence Storyboard

State Street

Enhanced Due Diligence

State Street


DOCUMENT HISTORY

Created/Revised By

Revision Details Created/Revised on Version No

Kavita Nair Initial Draft Nov 14, 2014 0.1Pooja Zaware Client Feedback

ImplementationDec 09, 2014 1.0

Shweta Mukherjee Client Feedback Implementation

Dec 11, 2014 1.1


Dec 11, 2014 1.2


Dec 15, 2014 1.3


Dec 18, 2014 1.4


Dec 19, 2014 1.5


Dec 22, 2014 1.6

Shweta Mukherjee ID Review Dec 24, 2014 1.7Shweta Mukherjee QA Review Dec 25, 2014 1.8Shweta Mukherjee QA Review Dec 26, 2014 1.9Vikas Salgaonkar Client Feedback

ImplementationDec 31, 2014 2.0

Vikas Salgaonkar Client Feedback Implementation

(Definitions)

Jan 2, 2015 2.1

Vikas Salgaonkar Module Review Jan 6, 2015 2.2Vikas Salgaonkar Client Feedback

ImplementationJan 9, 2015 2.3


Jan 13, 2015 2.4

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Jan 13, 2015 2.5

Vikas Salgaonkar Instruction updated for screen 08

Jan 14, 2015 2.6

Vikas Salgaonkar Instruction updated for screen 08

Jan 15, 2015 2.7

Priya Tiwari Screen 13 Animation Jan 15, 2015 2.8Pooja Zaware Instruction related

global change implementation

Jan 16, 2015 2.9


Jan 19, 2015 3.0

Priya Tiwari Language Edits Jan 23, 2015 3.1Priya Tiwari Client Changes

ImplementationJan 27, 2015 3.2


Jan 28, 2015 3.3

Priya Tiwari QA Fixes Jan 30, 2015 3.4Priya Tiwari Client Feedback

ImplementationFeb 2, 2015 3.5


Feb 9, 2015 3.6


Feb 10, 2015 3.7


Feb 11, 2015 3.8

Pooja Zaware Client Feedback Implementation

March 23, 2015 3.9


April 24, 2015 4.0

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What is a Storyboard? A storyboard or script is the preliminary version of detailed content and descriptions of the multimedia elements that will be integrated into the WBT course. What should you review?

Does the content meet the goals of the client training requirement? Is the information presented accurate? Does the flow of the content meet the instructional requirement? Do the graphics and animations illustrate the key learning points? Do the simulations and scenarios illustrate the key learning points? Does the text read appropriately?

How should you review or provide feedback?To activate the ‘Track Changes’ option in MS Word:

1. On the Review tab, click the Track Changes option in the Tracking section or2. Expand the Track Changes option3. Select Track Changes

In some of the version of MS Word, you can activate the Track Changes option by selecting it from the Tools menu.For content language review:

Onscreen text Transcript/voice-over text (VO)

For ID review: Onscreen text Graphic Descriptions Transcript/Voice Over Instructions for integration or development Other specifications

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Module Name: Enhanced Due Diligence

Slide Name: Course Objectives

Screen No: 01

On-Screen Text Graphics Description

By the end of this module, you will be able to:

Provide an overview of the Enhanced Due Diligence (EDD) process.

Recognize the risks and mitigants associated with the EDD process.

Analyze the EDD requirements and processes for customers.

Identify the process of onboarding Politically Exposed Persons (PEPs).

To continue, click Next.

Display the OST in progressive disclosure format.

141946057

Display the above image in sync with text.

The next button should be activated only when the entire OST is displayed.

Transcript

Interactivities

Course NavigationPrevious < NA Next > 02


Slide Name: Know Your Customer

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Screen No: 02

On-Screen Text Graphics DescriptionState Street is committed to comply with Anti-Money Laundering (AML) and Sanctions regulations, as implemented by the State Street AML and Sanctions Programs. T1

Know Your Customer (KYC) encompasses standards and procedures designed to ensure State Street knows with whom they are doing business. T2

Now that you have a better understanding of KYC, this module will provide detailed information related to the third component of KYC: EDD. T3


Display T1 and the below image

Then, display T2 and T3.

TranscriptNA

Interactivities

Course NavigationPrevious < 01 Next > 03

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Slide Name: Overview of Enhanced Due Diligence

Screen No: 03

On-Screen Text Graphics DescriptionEDD is a process that provides for a closer review of High-risk customers. EDD is required for High-risk State Street customers based on the AML Customer Risk Rating (CRR) and certain High-risk customer types notwithstanding the AML CRR.

EDD may be necessary when issues: Arise in the course of conducting CDD (such as relevant negative news is identified). Are uncovered through account/transaction monitoring and require the AML CRR to

be elevated to High-risk.

Display the OST and the following image in a progressive disclosure format. Image ID: 81556762

TranscriptNAInteractivitiesNACourse NavigationPrevious < 02 Next > 04

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TriggeredEDD

Required EDD

State Street



Slide Name: Required and Triggered Enhanced Due Diligence

Screen No: 04


EDD is critical to identify a High-risk customer’s anticipated transactions.

A High-risk customer’s activities should be reviewed more closely at the time the account is opened and more frequently throughout the term of the relationship.

To learn more about Required EDD and Triggered EDD, click each icon below.

Display the OST with the icons in a progressive disclosure format.

On clicking each icon, display respective text in pop-ups.

On closing the pop-up, direct the user to the main screen.

Images for pop-ups:

Required EDD Image ID: 139825753

Triggered EDD Image ID: 226399279

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TranscriptNAInteractivitiesCreate two icons for required EDD and necessary EDD.

Text for pop-ups:

Required EDDEDD is always required for customers rated High and for the following customers types, regardless of their AM CRR, including but not limited to: Correspondent accounts for Foreign Financial Institutions (FIs) (as required by Section 312 of the USA PATRIOT Act) Correspondent accounts for Foreign Banks (as required by Sections 313 and 319(b) of the USA PATRIOT Act) Foreign private banking customers (as required by Section 312 of the USA PATRIOT Act)

Note: For additional guidance on required information, data, and/or documentation for customer types, refer to the AML KYC Requirements Matrix in the AML Toolkit.

Triggered EDDCustomer accounts not subject to EDD requirements at the time of account opening may later become subject to EDD requirements if: The customer’s risk attributes and the AML CRR has changed, as a result of information updates during a periodic or event driven

review of the relationship or other information that comes to the Business Unit’s or AML Compliance’s attention. Material risk-related information, adverse or otherwise, concerning the customer is identified and elevates the AML CRR. AML Compliance increases the AML CRR.

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When the user clicks next without clicking all the icons, show the following pop-up:

“You must visit all information related to Required EDD and Triggered EDD before proceeding.”

Display a check mark next to the icon that a user has accessed.


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Slide Name: First Line of Defense Responsibilities

Screen No: 05

On-Screen Text Graphics DescriptionAfter completing CDD and determining that the customer is High-risk or the customer type requires mandatory EDD, the First Line of Defense must perform EDD that involves:

Investigative and analytic due diligence with respect to High-risk customers.

Reviewing transactions of existing customers that may be of High-risk as identified through the High-risk review process.

Image ID: 137934407TranscriptNAInteractivities


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Enhanced Due Diligence (EDD) Storyboard


Slide Name: Knowledge Check

Screen No: 06

On-Screen Text Graphics DescriptionCustomer accounts not subject to EDD at the time of account opening may later be subject to EDD requirements, if:Select the correct options, and then click Submit.

a) The customer’s risk attributes do not change.

b) Material risk-related information, adverse or otherwise, concerning the customer is identified.

c) The AML CRR risk attributes do not change.

d) AML Compliance elevates the AML CRR.

Number of attempts: 1Correct answer: B and DCorrect Feedback: That’s right! Customer accounts not subject to EDD at the time of account opening may later be subject to EDD requirements, if material risk-related information is identified, or AML Compliance finds cause, to elevate the AML CRR.Incorrect Feedback: That’s incorrect. Customer accounts not subject to EDD at the time of account opening may later be subject to EDD requirements, if material risk-related information is identified, or AML Compliance finds cause, to elevate the AML CRR.

TranscriptNAInteractivityNA

Course Navigation

Previous> 05 Next > 07

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Slide Name: General Enhanced Due Diligence Requirements

Screen No: 07

On-Screen Text Graphics DescriptionTo better understand the risks posed by a customer who requires EDD, the Business Unit obtains additional information about the customer, Ultimate Beneficial Owners (UBOs), and any other related and specified controlling parties and associated third parties.

KYC Shared Services uses the KYC Requirements Matrix to determine what information, data, and/or documentation is required by customer type and jurisdiction.

KYC Shared Services documents and reviews all information, data, and/or documentation obtained and works together with AML Compliance to:

Identify the risks posed by the customer. Prescribe any unique mitigants that may need to be implemented.

To learn more about UBOs, click the icon below.

Image ID: 92417422

Display the OST and the following icons on the screen in a progressive disclosure format.

UBOs

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Image for UBOs: 199553315Transcript NAInteractivitiesUBOsCollect information on beneficial owners with ten percent (%) (for High-risk) or more ownership of the entity, based on State Street's policy requirements, through documentary means.

This includes: Name Address including country Date of birth ID number


“You must read all information related to UBOs before proceeding.”



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Slide Name: Financial Information

Screen No: 08

On-Screen Text Graphics DescriptionFor all relevant customers, the Business Unit seeks to obtain financial information, as a source of EDD information for the customer.

To learn more about the financial information that the Business Unit need to seek for all relevant customers, click each icon below.

Separate Annual Report Annual Report Consolidated into Parent Report

Display the instruction on the screen and the icons for the following: Separate Annual Report Annual Report Consolidated into Parent Report

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To continue, click Next.TranscriptNAInteractivitiesDisplay the following tabs on the screen: Separate Annual Report Annual Report Consolidated into Parent Report

Text for Tabs:Tab 1: Separate Annual ReportThe following should be documented from the company website, audited financial statements or provided by the entity: Name of external auditors Evidence of audit The most recent audited financial statements, within the last two years Jurisdictional equivalent to audited financials Justification/attestation, approved by AML Compliance, for lack of information

Note: Some jurisdictions may not have these available due to jurisdictional regulations, in those instances, the jurisdictional equivalent; justification and an attestation are acceptable.

Tab 2: Annual Report Consolidated into Parent ReportThere may be circumstances where the customer is either a wholly or majority owned subsidiary or a Branch, that does not have its own separate annual report, but has their financial information consolidated into its Parent's report and accounts.

In these circumstances, the Parent’s consolidated report and accounts should be used, provided these are audited by a reputable auditor appropriate for the size and nature of the customer.

If the First Line of Defense has any concerns in this regard, the matter should be referred to the Business Unit AML Officer for agreement or otherwise that the auditor is appropriate and the Parent’s financials may be relied upon.

When the user clicks next without clicking all the tabs, show the following pop-up:

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You must visit all information related to the financial information that the Business Unit need to seek for all relevant customers before proceeding.

Display a check mark next to the step that a user has accessed.

Course Navigation07 < Previous Next > 09

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Slide Name: Examples of Information Reviewed

Screen No: 09On-Screen Text Graphics Description

Some examples of information contained in separate and consolidated reports that are reviewed and compared against the customer’s KYC profile are: Geographic location(s) Product and service offerings Future changes to their current business model Current Board of Directors, including changes Current executive management group, including changes

Display OST and the below image

Image ID: 131543666If the information provided by the customer does not match what is contained in the reports, the Business Unit contacts the customer for clarification. The Business Unit records the resulting information and documentation from this review in the customer’s profile.


Display OST and the below image.

Image ID: 145030681TranscriptNAInteractivitiesNACourse Navigation 08 < Previous Next > 10

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Slide Name: Verifying the Customer’s Source of Wealth

Screen No: 10


The customer’s source of wealth is a combination of data points collected through the KYC process. The information collected will differ depending on whether the wealth is acquired through:

Ownership of a business Employment or professional practice Inheritance Investments

Display the OST and the below image in a progressive disclsoure format.

Image ID: 181122116

Documentation that contains information can be used in conjunction with other data points to validate the customer’s source of wealth.

To learn more about the example documents that help identify source of wealth, click each image below.

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The final explanation of the source of wealth is the free text justification, which is the accumulation of the: Customer type Nature of business Source(s) of wealth Justification stating how these factors fit together to reasonably assess

the customer’s holistic view of net worth

Attributes contributing to the accuracy and reasonableness of the customer’s source of wealth include:

From where the funds came How the customer acquired the funds From whom, if received by an individual or entity When the funds were acquired The location(s) from where the funds came

TranscriptNAInteractivitiesText for slide 2:When user clicks image, display the related text:Non-Individual:

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Letter/contract note from previous investment company giving notification of proceeds of maturing investment/claim Signed tax return from a certified accountant Completed sale contract Loan agreement Recent loan statements Letter from donor confirming details of a gift and acknowledging the source of the donated funds Legal sale document(s) (such as contract notes) Signed letter from the Attorney Signed letter from a certified accountant

Individual: Last three months’ pay slips Confirmation from the employer of income and bonuses for last two years Bank statements that clearly show receipt of the most recent three months’ regular salary payments from the named employer Latest accounts, if self-employed Grant of Probate (with a copy of the will) that must include the value of the estate Loan agreement Recent loan statements Bank statements Letter from a donor confirming details of gift and acknowledging the source of the donated funds

When the user clicks next without clicking all the icons, show the following pop-up:“You must visit all information related to documents that help identify source of wealth before proceeding.”Display a check mark next to the icon that a user has accessed.Course Navigation Previous < 09 Next > 11

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Slide Name: Source of Wealth Examples

Screen No: 11


To learn more about a Reasonable Example and an Unreasonable Example to help determine a customer’s source of wealth, click each tab below.

Display the instruction on the screen and the two tabs in a similar template shown below.

On clicking each tab, display its respective information and images in a pop-up.

On clicking the pop-up, direct the user to the main screen.

Investment Advisor

Image ID: 145835600TranscriptNAInteractivitiesDisplay the following tabs on the screen: Reasonable Example Unreasonable Example

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Text for pop-ups:

Tab 1: Reasonable Example

A Regulated Investment Advisor in the non-bank financial services industry (NAICS: 523930) recently had their initial public offering/stock market launch to investors to raise capital for an acquisition of a competitor for increased market share.

(This leads one to conclude that a financial institution has recently accepted a large amount of investments from investors to grow the company. This source of wealth is reasonable as one can expect that operations, fees, investments, and earnings all contribute to the source of wealth, whereas the immediate source of funds from the offering are directly attributable to investments from new shareholders).

Therefore, the following must be included:

Customer Type + Nature of Business + Source(s) of Wealth + Justification = Reasonable Assessment that the source of wealth is accurate

Tab 2: Unreasonable Example

An unregulated Investment Manager located in Spain, whose profile had traditionally been investing in equities, is now heavily investing in Chilean mines, and wants to expand investments into the landscaping industry in Qatar.

(This leads one to ask the question of why an investment manager is changing his investment profile from consistent investment in equities to investments in High-risk industries and countries without providing a reasonable explanation).

When the user clicks next without viewing all information, display the text:“You must visit a Reasonable Example and an Unreasonable Example to help determine a customer’s source of wealth before proceeding.”Course Navigation Previous < 10 Next > 12

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Slide Name: Material Discrepancies

Screen No: 12

On-Screen Text Graphics DescriptionIn the course of verifying the identity of a customer, material discrepancies may arise between: Information obtained from the customer Information obtained during the verification process

Example: Tax identification number (TIN) or address that does not match with what the customer originally provided. T1

In these instances, KYC Shared Services may use one or more of the following steps to resolve such material discrepancies before the customer’s account is opened:

1. Confirm information received from the customer is correct.2. Verify identity through additional means. T2

To learn about an example of material discrepancies, click the Example button below.


For T1, create an animation showing the Tax Identification Number of a customer on Tax Identification Number ID and a bank form where a different Tax Identification Number is filled for the same customer. Show an alert sign to show that the situation is alarming.

Images: Google Image, 139888051Display the following two numbers on the Customer ID document and the State Street Document:Tax identification number 1: 954-80-3459Tax identification number 2: 954-81-3459

If material discrepancies cannot be resolved, KYC Shared Services is responsible for: Alerting the Business Unit AML Officer. Providing details of what customer information does not match, including the

documentation sources where the customer information can be found. Maintaining a record of such material discrepancies by documenting it and its

Use the following image with T3:

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Example

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resolution in the customer’s profile.T3


Image ID: 208534750

If the material discrepancy cannot be resolved and verification cannot be completed, the customer’s account cannot be opened and the matter must be considered by AML Compliance for suspicious activity reporting. Discrepancies not deemed to be material might include inability to verify an address – for instance, a recent change of resident/office.

All records related to the discrepancies made in the course of verifying identification of customers and how the discrepancy was resolved must be documented in the customer’s KYC profile and maintained for a period of at least five years from the date of the record. T4To continue, click Next.

Use the following image with T4 and the text that follows:

Image: 92100191

TranscriptNAInteractivityWhen the user clicks next without clicking all the icons, show the following pop-up:You must visit the example of material discrepancies before proceeding.Display a check mark next to the icon that a user has accessed.Course NavigationPrevious< 09 Next > 13


Slide Name: Site Visits

Screen No: 13On-Screen Text Graphics Description

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Site Visits

Trigger Events

State Street


Site visits are an important part of the EDD process for Money Service Businesses (MSBs), and other customer types, to confirm the veracity of the information provided by the customer. (T1)

To learn more about Site Visits and Trigger Events, click each image below.

Display T1 and the instruction following it on the screen.

Then show images for the following:Site Visits Image ID: 115951558Trigger Events image ID: 94727359

On clicking each tab, display its respective information and images in a pop-up.

On clicking the pop-up, direct the user to the main screen.

Images for pop-ups:Site Visits Image ID: 115951558Trigger Events image ID: 94727359

Text for the hover term:Money Service BusinessThe term "money services business" includes any person doing business subject to Bank Secrecy Act reporting and recordkeeping requirements, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:

Currency dealer or exchanger Check casher Issuer of traveller's checks, money orders or stored

value Seller or redeemer of traveller's checks, money

orders or stored value Money transmitter U.S. Postal Service

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Site Visits Report Requirements

Details of site visits are recorded, which at a minimum must include: Date of the site visit Customer name and location Names of all parties who attended the meetings Subject of such meetings Outcomes of the meetings Description of the business location Identified risk factors Image ID: 229492498

Use same image for other bullet points.The key elements of site visits remains a confident understanding of the: Customer Personnel associated with it AML Program and controls Operations that are in line with what would be expected

Risk factors include: Lack of transparency into operations and oversight of the customer’s

activities No physical location Constantly putting off the visit Unavailability of the Compliance personnel

The full copy of the report is added to the customer’s KYC profile. Transcript

InteractivitiesDisplay images for the following: Site Visits

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Trigger Events

Text for pop-ups:

Site VisitsThe Business Unit AML Officer performs site visits at the customer’s primary place of business at the onset of the relationship and annually thereafter. Information collected during the course of a site visit is NOT limited to the following examples: Establishing the physical location of the customer Validating the existence of a Compliance Officer Evaluating the AML training material Assessing that operations are in line with the expectations for that customer type Validating the presence of a current AML Program Affirming that the personnel representing the customer are present

Trigger EventsA site visit may be triggered by events identified by the First Line of Defense and escalated to the Business Unit AML Officer, or directly by concerns raised through processes within AML Compliance.

Some examples of trigger events include: Events that may indicate a heightened AML risk, such as regulatory action, relevant negative news, and additions to Sanctions

lists. Transaction monitoring findings and SAR filings. Customers in High-risk jurisdictions, determining that the Parent does not have either financial control of the account or adequate

oversight over the activity of the subsidiary in question.

The impact of such trigger events on site visitation requirements depends on the specifics of the trigger event and is determined by the Business Unit AML Officer in discussions with the Business Unit Chief Operating Officer and/or delegate and AML Compliance.

Note: Where a site visit is determined to be appropriate as a result of a SAR filing, care must be taken to avoid “tipping off” the customer.


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“You must visit all information related to Site Visits and Trigger Events before proceeding.”


Course Navigation Previous < 12 Next > 14

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Screen No: 14


Who requests additional information about the customer, UBOs, and any other related and specified controlling parties and associated third parties?

A. Business UnitB. KYC Shared ServicesC. AML ComplianceD. Business Unit Compliance Officer

Select the correct option, and then click Submit.

Number of attempts: 1

Correct answer: A

Correct Feedback: That’s right! The Business Unit requests additional information about the customer, UBOs, and any other related and specified controlling parties and associated third parties.

Incorrect Feedback: That’s incorrect. The Business Unit requests additional information about the customer, UBOs, and any other related and specified controlling parties and associated third parties.

TranscriptNAInteractivityNACourse NavigationPrevious<13 Next > 15

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Slide Name: Politically Exposed Person Identification

Screen No: 15


State Street is not prohibited from establishing relationships with PEPs, or from establishing relationships with customers who have PEPs within their organizational structure, unless there is reliable information that the PEP is improperly profiting from his/her public office.

Customer accounts for all PEPs require the application of EDD. Reasonable steps must be exercised to identify customers who are PEPs prior to opening the customer’s account.

PEPs may be identified through the checks against local or regional lists, which are conducted at the time the customer’s account is opened.

Content for Hover Text:PEP:

A PEP is defined as: A current or former:

Senior official (i.e., individual with substantial authority over policy, operations, or use of government-owned resources) in the executive, legislative, administrative, military, or judicial branches of a foreign government whether elected or not

Senior official of a major foreign political party Senior executive of a foreign government-owned

commercial enterprise A corporation, business, or other entity that has been

formed by, or for the benefit of, any such individual An immediate family member of any such individual (i.e.,

spouse, parent, sibling, children, or spouse’s parents and siblings)

A person who is widely and publicly known (or actually known by State Street) to be a close associate of such

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individual, i.e., senior level advisor

Note: The term PEP refers to foreign and domestic Non-Individuals/Individuals.

In the event that a match occurs, KYC Shared Services must review the match and eliminate any false potential name matches.

In the case of a possible or confirmed match, KYC Shared Services must review the match and provide documentation and an explanation as to why the match is either a false positive or confirmed match, and keep the record on file.

Any potential matches that cannot be cleared due to insufficient information and/or confirmed matches must be escalated to the OFAC/Sanctions Central Monitoring.

If a PEP is identified in overnight or periodic batch screening, the Business Unit and the KYC Shared Services has 30 calendar days to conduct EDD using the KYC Requirements Matrix and obtain required approvals.

Image ID: 215015659Edit the text ‘Audit’ as ‘ Review’

TranscriptNAInteractivityNACourse NavigationPrevious< 14 Next > 16


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Slide Name: Enhanced Due Diligence for Politically Exposed Persons

Screen No: 16


When it has been determined that a customer is or has a PEP associated with it, additional KYC must be performed on the PEP. The information, data and/or documentation required to complete the additional KYC is detailed in the KYC Requirements Matrix.

The Business Unit and/or KYC Shared Services reviews and verifies the required information, data, and/or documentation received and the Business Unit contacts the customer for any remaining information that is missing.

KYC Shared Services verifies information, data, and/or documentation received is valid and performs EDD prior to informing AML Compliance using the Enhanced Due Diligence Customer Profile.

To view the enlarged KYC Requirement Matrix, click the image below.

During the course of the relationship, the level and nature of risk associated with the PEP account may change, this applies to both situations, the individual customer is a PEP or the PEP is a UBO, controlling party, or associated third party.

AML Compliance, in conjunction with the First Line of Defense, is responsible for conducting ongoing High-risk customer reviews throughout the course of the relationship.

PEP accounts along with High-risk accounts are re-assessed within six months of account opening and annually thereafter. Image ID: 201242540

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TranscriptNAInteractivityWhen the user clicks next without clicking the image, show the following pop-up:

“You must view the KYC Requirements Matrix before proceeding.”

Display a check mark next to the image that a user has accessed.Course NavigationPrevious< 15 Next > 17

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Slide Name: Enhanced Due Diligence Customer Profile Form

Screen No: 17

On-Screen Text Graphics DescriptionDuring the onboarding process, if a customer is designated a High-risk, the First Line of Defense must send all KYC information, data, and/or documentation to AML Compliance via an AML Enhanced Due Diligence Customer Profile, which must contain the reason for rating the customer as High-risk.

AML Compliance is responsible for reviewing the AML Enhanced Due Diligence Customer Profile, to determine the unique mitigants required to onboard the customer and rendering an opinion via an FIU Assessment.

To learn more about the sections of Enhanced Due Diligence Customer Profile, click the form below.


Display the image of AML Enhanced Due Diligence Customer Profile form. User will navigate using scroll bars.

Transcript NAInteractivitiesWhen the user clicks next without clicking the image, show the following pop-up:“You must view all the sections of Enhanced Due Diligence Customer Profile form before proceeding.”Display a check mark next to the image that a user has accessed.Course NavigationPrevious < 16 Next > 18

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Slide Name: Risks and Mitigants

Screen No: 18

On-Screen Text Graphics DescriptionFor customers requiring EDD, the First Line of Defense may open a customer’s account only after the:

Business Unit Chief Operating Officer, equivalent, and/or delegate approves the request.

Money Laundering Reporting Officer (MLRO) where applicable, receives and acknowledges their review of the risks and any unique mitigants in the Financial Intelligence Unit (FIU) assessment from AML Compliance.


Display OST with below image in progressive disclosure format.

Image ID: 139825753

Unique mitigants are based on the situation and circumstances specific to each customer and may consist of one or more controls that are:

Established at onboarding Performed throughout the existence of a High-risk account, such as

enhanced transaction monitoring, which could dictate tighter algorithms or more frequent review cycles.

Note: Only the Business Unit AML Officer can override the AML CRR for Medium and Low-risk customers and only the AML Compliance FIU can override the AML CRR of a High-risk customer.To continue, click Next.

Image ID: 135375779

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The following are examples of potential mitigants that may be used for monitoring High-risk customers: Enhanced transaction monitoring Documenting existing relationships Repute and/or verification of customer directors Site visits Ongoing screening of key principles, Ultimate Beneficial Owners

(UBOs), and authorized signers, outside of automated sanctions screening


Image ID: 135375779

Transcript NAInteractivities


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EDD Process

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Slide Name: Enhanced Due Diligence Process

Screen No: 19

On-Screen Text Graphics DescriptionAfter it is determined that EDD must be performed, the First and Second Lines of Defense work together to complete the EDD process.

To learn more about the EDD process, click the icon below.

The animation of the EDD process will be shown on this screen.

Display Business Unit on the screen. Then show the BU contacting a Customer to obtain additional AML information/data/documentation. Display the text “To complete EDD, the Business Unit obtains additional KYC information/data/documentation and loads it into the KYC Platform.”

In the next scene, show the BU submitting the EDD Customer Profile to the KYC SS. Then show KYC SS verifying documents submitted by BU and the text “KYC Shared Services identifies UBO’s with 10% or more ownership, performs screening, and determines if a PEP was identified.”

Then show KYC SS verifying the source of wealth and coordinating with the BU for the EDD Customer Profile. Display the text “KYC Shared Services submits the EDD Customer Profile form to AML Compliance and the Business Unit.”

Then show AML Compliance reviewing the EDD Customer Profile and evaluating the customer file. Display the text “AML Compliance reviews the EDD Customer Profile form and evaluates the customer’s profile.”

Then show AML Compliance identifying any unique mitigants with the text “AML Compliance identifies any additional unique mitigants to manage risk prior to AML Compliance Approval.”

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Then show AML Compliance notifying the BU and KYC SS with the text “AML Compliance notifies the Business Unit and KYC Shared Services with notice of Endorsement and/or Non-Endorsement by submitting the FIU Assessment.”

Then show the BU reviewing the EDD customer profile and show labels for Risk and Mitigants. Display the text “The Business Unit determines to accept the risk and implement unique mitigants or reject and stop onboarding.”

Finally show AML Compliance signing the FIU assessment with the text “AML Compliance signoffs on the FIU Assessment.”

Transcript NAInteractivitiesWhen the user clicks next without clicking all the icons, show the following pop-up:

“You must view the complete EDD process before proceeding.”

Display a check mark next to the icon that a user has accessed.Course NavigationPrevious < 19 Next > 20

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Screen No: 20


________ verifies the source of wealth and collaborates with the ________ to complete the EDD Customer Profile.”

Select the correct option, and then click Submit.

A. KYC Shared Services; Business UnitB. KYC Shared Services; AML ComplianceC. Business Unit; KYC Shared Services D. AML Compliance; KYC Shared Services

Number of attempts: 1

Correct answer: A

Correct Feedback: That’s right! KYC Shared Services verifies Source of Wealth and collaborates with the Business Unit to complete the EDD Customer Profile.

Incorrect Feedback: That’s incorrect. KYC Shared Services verifies Source of Wealth and collaborates with the Business Unit to complete the EDD Customer Profile.

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Module Name: Enhanced Due DiligenceSlide Name: Record RetentionScreen No: 21On-Screen Text Graphics Description

As a requirement, all customer facing businesses, support functions, and control functions must maintain records of a customer’s identity, transactions, and other significant records.

This ensures that legal and regulatory requirements in the jurisdictions in which it operates are met thereby ensuring confidentiality, bank secrecy, and data protection.

AML records must be maintained for a minimum of five years (from the end of the customer relationship in the case of identity records) or longer, if local regulation requires.

For European Union (EU) purposes, all non-transactional account records must be retained for five years from cessation of relationship, and transactional records for five years from the conclusion of the transaction.

Records must be stored to facilitate adequate access and retrieval in a timely manner.


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Slide Name: Module Summary

Screen No:22

On-Screen Text Graphics DescriptionImportant points covered in this module:

KYC encompasses standards and procedures designed to ensure State Street knows with whom they are doing business.

A High-risk customer’s activities should be reviewed more closely at the time the account is opened and more frequently throughout the term of the customer relationship.

After completing CDD and determining that the customer is High-risk or the customer type requires mandatory EDD, the First Line of Defense must perform EDD.

To better understand the risks posed by a customer who requires EDD, the Business Unit obtains additional information about the customer, UBOs, and any other related and specified controlling parties and associated third parties.

The customer’s source of wealth is a combination of data points collected through the KYC process.

In the course of verifying the identity of a customer, material discrepancies may arise between information obtained from the customer during the identification and verification process.

Site visits are an important part of the EDD process for MSBs, and other customer types, to confirm the veracity of the information provided by the customer.

Reasonable steps must be exercised to identify customers who are PEPs prior to opening the customer’s account.

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AML Compliance is responsible for reviewing AML Enhanced Due Diligence Customer Profile, to determine the unique mitigants required to onboard the customer and rendering an opinion via an FIU Assessment.

After it is determined that EDD must be performed, the First and Second Lines of Defense work together to complete the EDD process.

AML records must be maintained for a minimum of five years (from the end of the customer relationship in the case of identity records or longer) if local regulation requires.

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Slide Name:

Screen No: 23

On-Screen Text Graphics DescriptionThe next module in the KYC series is focused on Ongoing Customer Relationship. Ongoing Customer Relationship are activities that maintain the customer’s account to ensure that the KYC information we have on file is accurate.

To get familiar with these activities, please proceed to Module 5: Ongoing Customer Relationship.

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