KYCrahapesu

KYCrahapesu is a term used in Indonesian financial policy discourse to describe the integration of Know Your Customer (KYC) practices with anti-money laundering (AML) efforts, particularly the overall aim of preventing pencucian uang. It is not a formal regulation, but a shorthand used by regulators, industry players, and scholars to discuss how identity verification, risk assessment, and transaction monitoring reinforce each other to deter illicit finance.

In practice, KYCrahapesu encompasses customer due diligence (CDD), ongoing monitoring, enhanced due diligence for high-risk clients, verification of beneficial ownership, source of funds checks, sanctions screening, and the timely reporting of suspicious transactions to authorities.

Regulatory context: In Indonesia, AML/KYC obligations are overseen by Bank Indonesia (BI) for banks and some payment providers, and by the Financial Services Authority (OJK) for non-bank financial institutions. Coordination with the Indonesian Financial Transaction Reports and Analysis Centre (PPATK) helps ensure compliance with international standards, including FATF recommendations.

Implementation challenges include privacy and data protection concerns, the cost of implementing digital identity verification, maintaining data quality, interoperability between institutions, and onboarding friction for customers.

Impact: When effectively implemented, KYCrahapesu aims to increase transparency of customer activity, reduce money laundering and terrorism financing, and enhance consumer protection and financial system integrity.

See also: KYC, AML/CFT, CDD, EDD, PPATK, FATF, BI, OJK.