Effective KYC procedures stop legitimate companies from conducting business with organizations or individuals involved in illegal activity, such as money laundering or terrorist financing. The process also gives the company an insight into the expected activities of the customer and the relationship they can expect.
Know your customer (which is more commonly referred to simply as KYC) is a major part of any business’s fight against money laundering and financial crime. In many sectors, such as financial services, it’s a regulatory requirement.
During the KYC process, a business must identify the potential customer and Ondato verification their identity. They must also ensure that the person who is attempting to open the account is exactly who they’re claiming to be. On top of this, the business involved must gain an understanding of that customer’s potential activities and the level of money laundering risk they pose. After the KYC onboarding process, the business must monitor the customer’s activities on an ongoing basis.
Effective KYC procedures stop legitimate companies from conducting business with organizations or individuals involved in illegal activity, such as money laundering or terrorist financing. The process also gives the company an insight into the expected activities of the customer and the relationship they can expect.
Across the financial services industry particularly, KYC processes are becoming more and more rigorous. But, what are the key KYC steps that businesses must include in order to truly know their customers and stay compliant with regulations? Let’s take a look.
