The process of perpetual KYC (pKYC) can remove the need to look at risks associated with individuals or entities in a snapshot in time.
pKYC is the practice of maintaining up-to-date customer and counterparty records through an automated, integrated workflow of data checks that take place in near real-time.
Adopting pKYC helps you to be more agile, with near instantaneous response times when there are changes to a customer’s information. Make risk-based decisions with greater confidence using the most recent and robust data available.
Perpetual KYC (pKYC) is a transformative approach to understanding and monitoring risk across your customer and supplier network. A pKYC approach can help you address critical problems, making it an important solution that can enhance compliance, mitigate financial crime risk, and support operational efficiency.
Businesses and financial institutions have many regulations globally they need to adhere to – from anti-money laundering (AML) to fraud prevention and supplier due diligence. Perpetual KYC can help with compliance efforts, digitally transforming key areas of due diligence activity you need to perform.
Traditional, periodic reviews can lead to outdated information that delays detection of material risks across a third-party network. pKYC can foster continuous screening and monitoring, updating third-party data to support risk assessment in near real-time and therefore faster responses.
When organizations use pKYC for continuous monitoring, they are better equipped to identify behavioral patterns and anomalies that may indicate fraud and other risky behaviors. This means mitigating actions can be taken with fewer delays.
The rise of AI-enabled fraud, including deepfakes and synthetic identities, means organizations may be thinking about advanced pKYC solutions. AI and machine learning tools can be leveraged as part of screening, to support detection and mitigation of fraudulent tactics.
When organizations use pKYC, it can lead to less manual work. Traditional KYC often involves manual intervention and significant operational costs. As pKYC can automate data checks and flag changes related to material risks across a third-party network, it has potential to enhance efficiency for risk and compliance teams.
pKYC processes can integrate data from many sources to create a holistic view of risk related to an individual or entity. A holistic approach supports better decision-making when managing third-party relationships – proactively capitalize on opportunities as well as handling risks.
Digital KYC processes can enhance customer and supplier experiences by managing friction and delays during onboarding or due diligence. pKYC has the potential to create an always-on view of information to support smoother risk and compliance interactions throughout the lifecycle of a relationship.
Orchestrate pKYC processes based on your risk policy: Moody's is here to automate your compliance checks and flag when there are changes to an individual’s or entity's risk profile.
Integrate powerful, global datasets on beneficial ownership, PEPs, sanctions, adverse media, and other areas important to pKYC checks. Moody's data can be integrated with other external sources too.
Change and update your pKYC process when you need to: if regulations change; you move into a new jurisdiction; you’re scaling fast – we can work with you to adapt your pKYC processes.
Three years after our original pKYC podcast series, we’re revisiting the topic to examine how the landscape has transformed. From technological innovation to shifting regulatory expectations, pKYC is becoming a cornerstone of real-time customer due diligence.
In this episode, Moody’s Industry Practice Leads Chor Teh and Marisol Lopez Mellado unpack:
Listen-in to stay ahead of the curve and find out how pKYC could shaping the future of compliance.
In today’s fast-moving business landscape, waiting to uncover risk is a risk itself.
Moody’s special report explores how Perpetual KYC (pKYC) can reshape risk management and compliance—supporting dynamic monitoring of material changes across global entities.
Discover just how much can change in 3 years here, there and everywhere…
1. What is Perpetual KYC?
Perpetual KYC (pKYC) is an approach to Know Your Customer (KYC) compliance that continuously monitors and updates customer information in near real-time, rather than relying on periodic reviews. It uses automation, artificial intelligence (AI), and machine learning (ML) to dynamically refresh customer profiles when a material change occurs—such as a new sanction, adverse media alert, or ownership update. This proactive model can help organizations maintain more up-to-date risk insights and respond to emerging threats.
2. How is Perpetual KYC different from Traditional KYC?
Traditional KYC is typically performed at onboarding and then refreshed at fixed intervals (e.g., every 1-, 3-, or 5-years based on risk rating). Looking at risks during a “snapshot” in time could leave gaps where customer data becomes outdated, increasing exposure to financial crime and compliance risk.
Key differences:
| Feature | Traditional KYC | Perpetual KYC |
|---|---|---|
| Frequency | Periodic (1–5 years) | Continuous, real-time |
| Process | Manual/semi-automated | Fully automated |
| Risk approach | Reactive | Proactive |
| Data freshness | As of last review | Updated dynamically |
| Analyst role | Reviews all customers | Intervenes only on alerts |
3. What are the potential benefits of Perpetual KYC?
Benefits can include:
4. Are there drawbacks to Perpetual KYC?
While pKYC offers advantages, there can be challenges, including:
5. Deciding on Perpetual KYC vs. Periodic KYC
Periodic KYC remains common but is increasingly becoming outdated, as it can create compliance gaps between reviews, leaving organizations more vulnerable to fast-changing risks. Perpetual KYC offers a dynamic, event-driven model that can be used to align with modern regulatory expectations and digital transformation goals. For organizations seeking agility and resilience, pKYC might prove a viable option to periodic review.
6. Are there challenges to implementing Perpetual KYC?
7. What’s the Moody’s difference with pKYC?
Moody’s delivers a holistic, data-driven approach to perpetual KYC, combining:
Disclaimer: This content is for informational purposes only and reflects our understanding of the subject matter as of the date of publication. It does not constitute legal, regulatory, or compliance advice.
Moody's conducted a study into the perceptions and understanding of perpetual KYC. Interviewing 60 risk and compliance professionals across three continents. We are pleased to share our findings with you.
Listen to Paul Nola, Partner at Context Consulting, present a summary of the key findings of our study on perpetual KYC. Then hear what our panel from Moneybox, EY, Aspire FT, and Moody’s said about the future of pKYC and its potential to transform risk and compliance.
We asked interviewees to describe the benefits of a perpetual approach to KYC. These were distilled into 11 themes that can be grouped along the lines of Maslow’s hierarchy of needs.
Perpetual KYC (pKYC) supports financial institutions to more promptly identify and respond to changes in customer-related risks that may warrant further due diligence.
Know Your Customer (KYC) is the process that businesses, including regulated entities like banks and other financial institutions, follow to verify the identity of their customers, assess their risk profile, and monitor them on an ongoing basis.
FATF's Recommendation 16 requires that providers of cross-border payment services (PSPs) include complete originator and beneficiary information in wire transfers. This is necessary to permit detection of the use of wire transfers by criminals or terrorists moving money.
For a second year, the Chartis Financial Crime and Compliance50 ranking and report named Moody's as category winner for perpetual KYC
Maxsight™ is a single platform for unified risk management. It brings together thousands of data points to support your organization to take a holistic view of risks and then see them from different lenses.
Shared risk intelligence serving different functions in your organization. For digital onboarding, sanctions compliance, third-party risk management, supply chain risk management, and more.
Check out our page for more information on Moody’s Maxsight™.
We would love to show you what Moody's can do! Get a demo or alternatively, keep reading to discover more about how Moody's can help you.
