The Know Your Customer (KYC) process may initially seem relevant only to financial institutions. However, the truth is that KYC is good practice for any company seeking to establish trust with clients, vendors, and partners. In the aviation industry, KYC plays a vital role in ensuring compliance and mitigating risks. Let’s explore the world of KYC in aviation and understand why it is an essential practice. 

Understanding KYC: 

KYC, introduced with the Patriot Act, encompasses regulatory procedures used to verify a customer’s identity and assess the potential fraud risks they may pose. While some airlines may have less stringent KYC guidelines, following the example of banks is a recommended practice. Companies that adhere to stricter KYC compliance are less likely to face fines, scandals, and dissatisfied customers.  

The KYC process involves three major steps:  

1. Customer identification: This step verifies the customer’s identity by examining the provided KYC documents. 

1. Customer Due Diligence (CDD): The CDD process collects all necessary information about the customer from reputable sources to analyze their risk factors. It includes screening for Politically Exposed Persons (PEPs), conducting sanctions screening, and assessing adverse media. If any red flags are identified, clients may be subjected to Enhanced Due Diligence (EDD). 

1. Ongoing monitoring: KYC compliance extends beyond customer onboarding. Ongoing monitoring ensures that customers maintain their identity and do not pose future risks. Continuous monitoring should be conducted throughout the entire customer lifecycle. 

The Importance of KYC in the Aviation Industry: 

While legal compliance is an obvious reason, let’s delve into specific ways in which KYC compliance is crucial in the aviation industry: 

1. Employees: Thorough background checks are essential for all employees, from janitors to top executives, to ensure safety and security. This includes verifying personal information, employment history, and previous addresses. Additionally, regular biometric checks may be conducted to prevent impersonation. 

1. Suppliers: Many countries have laws prohibiting business transactions with sanctioned entities to prevent money laundering and terrorist financing. However, recognizing reliable vendors and suppliers can be challenging, as some may hide behind fake identities. KYC processes assist businesses in identifying sanctioned parties, managing high-risk clients, and evaluating potential business relationships. 

1. Travelers: Airlines prioritize stringent passenger screening for obvious reasons. KYC processes play a significant role in verifying passenger identities, validating documents, and ensuring their authenticity. To enhance the passenger experience, airports are implementing automated passport checks supported by KYC software, resulting in faster verification and smoother processes. 

The Advantages of Digital KYC: 

Leveraging technology for KYC processes offers several benefits: 

1. Cost-effectiveness: Manual verification processes require substantial resources, including labor, office space, and training. Implementing automated customer identification programs can significantly reduce costs. Solutions like Faceki offer KYC checks for as low as less than $1 per customer, making it a cost-effective option. 

1. Faster Processing Time: Swift onboarding is crucial for business operations. Traditional paper-based KYC processes can take up to 18 minutes per check. In contrast, advanced solutions like Faceki complete the process in under 30 seconds, ensuring efficient customer onboarding and reducing the risk of losing clients. 

1. Higher Success Rate: Human errors can impede manual processes, resulting from insufficient training, fatigue, or lack of focus. Modern KYC technology utilizes biometric data mapping to prevent spoofing and efficiently detects document alterations, resulting in a success rate of 99.8%. 

Ensuring KYC Compliance: 

As Anti-Money Laundering (AML) regulations continue to evolve, relying on a comprehensive tool is crucial to maintaining compliance without daily worries. Solutions like Faceki empower businesses to adapt to regulatory changes, foster client familiarity, and provide ongoing monitoring capabilities, safeguarding against illicit activities and potential AML fines. 

Embracing Aviation KYC is a prudent approach for any aviation-related entity. By adhering to robust KYC practices, businesses can establish trust, maintain compliance, and mitigate risks. Leveraging digital KYC solutions like Faceki not only streamlines the verification process but also ensures cost-effectiveness, faster processing times, and higher success rates. Safeguard your business, protect against bad actors, and stay AML-compliant with Faceki’s innovative KYC solutions. 

To learn more about how Faceki’s identity verification solutions, click here.