Know Your Customer (KYC) is a crucial component, particularly in today’s global economy, and it is critical for banks and other financial institutions to avoid any anti-money laundering framework.
It is the procedure for gathering information on a customer, validating their identity, and assessing the risks associated with establishing a commercial relationship with them.
This procedure is intended to safeguard financial institutions from money laundering, corruption, fraud, and terrorist financing. Establishing and authenticating the customer’s identification, analyzing their actions to validate sources of cash, and assessing the money laundering risks linked with them are the basic steps of this approach.
KYC is considered a required step in establishing a customer relationship with a credit or financial institution. It can ensure that such institutions have comprehensive client information.
The major goal of the KYC requirement is to prevent criminals from laundering money through banks and other financial institutions. It also aids banks in better understanding their consumers, allowing them to improve their services and manage risks accordingly.
The KYC process assists financial institutions in avoiding many regulatory penalties. Because of the threats that financial fraud and money laundering pose to the banking industry, these procedures are critical. That’s why businesses should conduct thorough background checks and try to avoid fraudulent activity as much as possible.
Scammers will find it hard to access your platform, and your customers don’t have to worry about their personal data getting stolen. It also allows you to retain all the information you require online as well as protect customer information used for authentication.
Compliance & Obligation
KYC compliance increases customer identity methods and verify them regularly in line with the regulations, enabling to fight fraud and keep away from penalties from the supervisory authorities.
Anti-Money Laundering regulations must be adopted for a variety of businesses in a variety of industries.
Banks, insurance organizations, online payment solutions, and crypto firms are the most prevalent entities required to comply with KYC regulations.
Simplifying the Process of Onboarding Customers
Virtual onboarding can help you improve the efficiency of your customer relationship.
Prior to remote onboarding, establishing a customer’s identity required the customer’s physical presence to ensure they were who they claimed to be, which could take time and effort.
Because of the need for remote customer onboarding and the advancement of technology in this industry, biometrics has become an important identity verification tool for financial institutions.
FACEKI, can help you carry out a thorough KYC, CDD, and EDD (Enhanced Due Diligence) process.