The fundamental responsibility of a KYC analyst during the due diligence process is to verify customer information and resolve any identified discrepancies. When a conflict arises between client-provided documents and a reliable, independent source like a country's business register, the standard and most appropriate initial action is to seek clarification directly from the client. This step is crucial for understanding the nature of the discrepancy, which could stem from a simple clerical error, a recent change in legal status not yet updated in public records, or a more significant red flag. This direct inquiry is a core component of the investigation and risk assessment process before any further action is taken.

A. Filing a suspicious activity report is a premature and disproportionate response. A discrepancy requires investigation first; a SAR is filed only if that investigation leads to a suspicion of illicit activity.

B. Using only the client's documentation ignores contradictory evidence from a reliable, independent source, which undermines the entire principle of verification in the KYC process.

C. Unilaterally using the business register information without client consultation fails to resolve the discrepancy and understand its cause, potentially leading to an inaccurate client profile.

1. ACAMS Certified Know Your Customer Associate (CKYCA) Study Guide

(2022). Chapter 2: "Essential KYC Components

" Section: "Customer Due Diligence (CDD)." The guide emphasizes that when discrepancies are found during the verification process

the financial institution must take reasonable measures to resolve them. The primary method for resolution is direct communication with the customer to obtain clarification and/or corrected documentation.

2. Financial Action Task Force (FATF)

(2012-2023). "International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation – The FATF Recommendations

" Interpretive Note to Recommendation 10 (Customer Due Diligence)

Paragraph 14. The note details the requirement to verify the identity of the customer and understand its legal structure. It implies that any inconsistencies discovered during this verification must be satisfactorily resolved to meet CDD obligations.

3. Wolfsberg Group

(2020). "Frequently Asked Questions (FAQs) on Correspondent Banking

" Question 23. While focused on correspondent banking

the principle applies universally. The guidance states that financial institutions should have processes to address and resolve discrepancies in information

which typically involves client outreach as a first step before considering relationship termination or reporting.