KYC means “Know Your Customer.” It describes the process of verifying the identity of customers – either before or during the start of doing business with them. The KYC process is performed to prevent illegal activities such as money laundering or fraud, in return protecting both company and client.
Step up your KYC game
As there is no one KYC Process, what it really comes down to is knowing the needs of your institution and complying with regulations, but don’t worry because IDnow is here to assist in finding the right solution just for you.
Learn in a first chat with one of our experts how the IDnow Proofing Platform enables you to get your KYC process up and running!
The extensive use of new technologies and the internet makes it necessary to define standards that help fight online fraud e.g.
The KYC procedure responds to a legal and global imperative for any type of business that wants to onboard a user as a client and know that they are trustworthy.
The KYC process consists in verifying that the client is actually who he says he is and giving him access to the services or products he needs. This verification is carried out through different methods, although not all comply with legal requirements.
What are the three components of KYC?
In an increasingly global economy, financial institutions are more vulnerable to illicit criminal activities. Know Your Customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering and terrorist financing.
Benefit from increased conversion rates and optimized customer acquisition costs.
Grant instant access once verified, avoiding any friction or difficulty between business and users.
Identify users at anytime, from anywhere. Go beyond the basic ID and benefit from a more complete identity.
Store identities and credentials with all levels of assurances (LOA). Customize your solutions while meeting all regulatory requirements without needing to go elsewhere.
KYC is required for financial institutions that deal with customers during the opening and maintaining of accounts.
When a business onboards a new client, or when a current client acquires a regulated product, standard KYC procedures generally apply.
KYC regulations have become an increasingly critical issue for almost any institution that interacts with money (so, just about every business):
While banks are required to comply with KYC to limit fraud, they also pass down that requirement to those organizations with whom they do business.
The two basic mandatory KYC documents are proof of identity with a photograph and a proof of address. These are required to establish one’s identity at the time of opening an account, such as a savings account, fixed deposit, mutual fund and insurance.
Financial institutions have reported spending $60 million annually, based on research conducted by Consult Hyperion in 2017. Some are even spending up to $500 million each year on KYC, according to a 2016 Thomson Reuters survey.
Triggers for KYC can include:
Unusual transaction activity
New information or changes to the client
Change in the client’s occupation
Change in the nature of a client’s business
Adding new parties to an account
Requirements vary in different jurisdictions. However, account owners generally must provide a government-issued ID as proof of identity. Some institutions require two forms of ID, such as a driver’s license, birth certificate, social security card or passport. In addition to confirming identity, the address must be validated. This can be done with proof of ID or with an accompanying document verifying the address on record.
The difference between AML (anti-money laundering) and KYC (Know Your Customer) is that AML refers to the framework of legislation and regulation that financial institutions must follow to prevent money laundering. KYC is more specific and relates to verifying a customer’s identity, which is a key part of the overall AML framework.
IDnow offers the right solution for many markets and use cases. In addition to the BaFin from Germany and the FMA from Austria, IDnow also provides compliant solutions for all other EU markets.
IDnow & KYC
Effective KYC processes are the backbone of any successful compliance and risk management programme, and the demands of meeting KYC obligations are intensifying.
Digital verification via video-chat, backed by AI-technology. Our AML-compliant solution meets high security requirements.
Automated, AI-powered identity verification for users all over the world – anytime, anywhere. And AML-compliant.
Our automated instant identity verification is based on Artificial Intelligence and Machine Learning. It’s simple, secure, and available anywhere, at any time.
Identity verification is in the process of being certified by the ANSSI and complies with the Anti-Money Laundering Directives (AML-CFT) and meets high security requirements.
NFC-based solution for the electronic German identification card. Our identity verification solution with easy data scanning via smartphone. AML-compliant.