Know-Your-Customers, also known as KYC, refers to the practice of confirming the identities of consumers by examining their supporting documentation and ensuring that they are authentic. In addition to this, it checks to see if a particular individual is on any banned lists.
Verifying a person’s possible risks is made easier for businesses that follow the KYC compliance guidelines. It is even capable of preventing the financing of terrorist organizations, money laundering, as well as other types of minor fraud. We at DIRO assist businesses in achieving a healthy equilibrium between 100% KYC compliance and a reduction in the amount of friction involved in the onboarding process for new customers.
KYC Verifications process
It is required for an individual to possess certain KYC documents to finish the Know Your Customer procedure successfully. Depending on the type of Know Your Customer verification that is required, you may either submit hard copies or scanned copies of these documents. The Know Your Customer check must have one of two essential types of KYC documents. The first one proves your identity, while the other verifies your address. Evidence of identity can also be provided in the form of a passport or a driver’s license. You can double-check these documents online or in person at any KYC agency that you choose. You will be able to finish the procedure if you provide all of the KYC documents that were requested from you throughout each step of the KYC Verification process.
-
Collection of Information
The process of getting the customer’s personal information is the first step in the Know Your Customer step procedure. They are obligated to complete a Know Your Customer registration form that can be found online on the platform of their choice to engage in financial dealings. The applicant is responsible for ensuring that the information provided is accurate and up to date as part of their due diligence.
-
Submission of documents
An individual who applies for financial services or who has the potential to utilize those services is required to provide KYC documents that could verify their identity and their residence status. The submission may take the form of either an electronic file or a physical object.
-
Identity verification
Based on the documentation that was provided, the authorized agency or organization will carry out the identity verification. For instance, if the applicant provides a driver’s license, the Department of Motor Vehicles will be responsible for conducting the verification (DMV).
-
Residency verification
For residency verification, it is necessary to ascertain the resident’s status (domestic or foreign), current housing address, alternative home address, citizenship, and other relevant information.
The objective of knowing your customer checks is to lessen the likelihood of identity theft, financial fraud, fraudulent transactions, as well as the funding of criminal organizations. For this purpose, KYC Verification also helps to make the risks extra tangible for business owners and to develop a better understanding of the role of customers. The verification of documents and biometric information is the primary focus of the KYC procedure. Examples of KYC document verification include checking an ID card, confirming a person’s face, and using invoices as proof of address.
Conclusion
By ensuring that efficient KYC protocols are in place at the time an account is opened, you are helping to prevent fraudsters and other types of financial criminals from using your services. The information about the customer that is obtained during the onboarding process is also used to enhance the monitoring process. This is because it gives information into the consideration and the anticipated use of funds.
