When an individual purchases a share in a racehorse or a stallion, or a stallion nomination for their broodmare – in fact whenever you welcome a new customer to your business – we recommend you collect specific personal details and verify the accuracy of those details.
This process helps protect the integrity of your business and our industry, and aids the debt recovery process if required.
Wrkplace Digital has launched a Know Your Customer (KYC) solution to help businesses onboard new customers quickly and verify their identity and address.
Andrew Jarvis
KYC also includes AML screening – perfect for racehorse syndicators to comply with their Anti-Money Laundering (AML) obligations.
Why verify a buyer’s identity?
The Anti-Money Laundering and Counter Terrorism Financing Act 2006 (AML/CTF Act) imposes an obligation on certain “reporting entities” providing a “designated service” to detect and deter money laundering and terrorism financing.
In the racing and breeding industry, racehorse syndicators holding an Australian Financial Services Licence (AFSL) are deemed to be providing a “designated financial service” and are therefore compelled to implement an AML/CTF Program.
There are two parts to an AML/CTF program. Part A must include processes and procedures to help identify, mitigate and manage the money laundering risks. Part B is focused on the procedures for identifying customers and beneficial owners, and verifying their identity.
The Wrkplace KYC solution helps meet the obligations of Part B.
We believe ALL businesses should undertake this due diligence. Racehorse trainers, syndicators, agents and farms all have a duty of care to verify the bona fides of their customers.
To learn more about this topic, here are 6 reasons to verify the identity of your new customers.
What information does a new customer need to provide?
Our KYC solution allows customers to enter their full name, date of birth and current residential address.
Background checks against independent national databases regularly result in your customer’s identity being verified successfully. On occasions, they may need to submit a government document ID such as a Drivers Licence, Passport or Medicare Card number in order to self-verify successfully.
Our solution, using Australia’s leading identity verification platform GreenID (by GBG), also performs checks against various watch lists such as Interpol Most Wanted, ICE Most Wanted, DFAT, Politically Exposed Persons, Local and Global Sanction lists, Tax and Fraud registers, and others.
What happens if the buyer’s identity and/or address cannot be verified?
Around 80% of customers are verified “first-time” via background checks. But around 20% are asked to provide additional proofs, usually because they have changed address recently and have not yet updated their Driver’s Licence or Electoral Roll.
Our solution interactively provides alternate options such as providing a Drivers Licence / Passport / Medicare Card number or a recent copy of a Bank Statement, Rental Agreement, Utilities Bill. This is then verified once and never stored on our system.
What if the buyer can’t provide the proof needed?
Customers must provide satisfactory proof of identity and address to be “ID verified”.
If you are a “reporting entity” providing a “designated financial service” (such as racehorse syndication), customer applications to purchase a share in a horse should NOT be accepted if identity verification is unsuccessful or the customer appears in a watch list of concern.
If you operate another business not providing a financial service, we advise the verification outcome and you may choose whether or not to accept the customer. We would advise not to of course.
If the new customer cannot prove they exist nor prove their current residential address, you do not want them as a customer.
If the new customer exists on a watch list of concern, you do not want them as a customer.
Technology has made it a breeze to gather customer information and verify customer identities
Learn more about how our Know Your Customer (KYC) service helps protect your business
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