Colombia’s “Know Your Client” Principles Help With Ethics
By Stephen Shepherd, Marketing –
Columbia’s new legislation helps businesses create a culture of ethics by avoiding problems that come from not knowing business clients and associates.
When I was a young lad, my parents frequently counseled me to choose my friends carefully. “Tell me who you walk with, and I will tell you who you are,” they said, quoting an old adage.
Whenever I developed an improper attitude or annoying behavior, my parents would kindly point out from which of my young friends it originated, all in the hopes that I would reconsider my course and become the man they knew I could become.
Choose Wisely
The people with whom we associate have an enormous effect on our personal character, the path our lives take, and the reputation we build. In the same manner, we must choose our business environments carefully if we are to guarantee our success and protect our brand image.
As international lines blur between firms, providers and clients, the risk of dealing with sketchy associates also intensifies. There needs to be tools and measures put into place to help the parties involved know how they are dealing with.
Columbia Sets a Standard
We see an excellent example of these measures from recent legislation that Colombia established in order to prevent companies from becoming involved in illegal operations, intentionally or not.
Risk management and compliance software is currently the most widely used tool for efficiently organizing and processing risks, but it is by no means foolproof or thorough enough to act alone. In Colombia, “know your client” (KYC) principles were implemented in order to ensure compliance, strengthen reputation, and build lasting business relationships.
Ethics is the Name of the Game
KYC means to carry out due diligence on a client to verify their identity and to prevent theft, fraud, money laundering and terrorist financing, all with the goal of reducing a company’s myopia and increasing its true competitive advantage.
Ethics lie at the heart of making responsible decisions and creating a strong image. When a firm ensures that it walks with ethical partners and clients, it tells us that it values promoting a safer environment for everyone, from the common folk to other businesses. KYC can facilitate this lifelong process, helping to lay the foundation for reaching true business potential.
