How are you sure that someone is who they claim to be they are? How do you reply to this query when your clients aren’t sitting in front of you?
For financial assistance organizations, in particular, know your customer compliance has an enormous impact on how they allow clients to open accounts and perform financial payments on their desirable device. Clients want to open a bank online but banks must comply with anti-money laundering and know your customer requirements while also fighting thefts, financial crimes, and reducing high-risk payments or transactions.
To help meet your KYC regulations, you need an identity authentication solution that can provide both assistance to your clients and protection to your organizations. In order to do so, look for smartphone and sites-enabled solutions that grip on-device technology, biometric verification, online document verification adaptable machine learning, and identity experts to reach accurate identity results within a consistent digital environment your clients want.
Know Your Customer Compliance
Know your customer compliance is not just one-time use. It is an in-depth authentication procedure that begins with developing a customer identification program (CIP). It comes with assessing risk affiliated to each user. If the client is low-risk, basic know your customer is sufficient but if the client has a high-risk profile then enhanced know your customer is applied to that client.
Although know your customer regimes vary around the sphere but below are some similar requirements found in all:
- Develop CIP
- Recognize individual clients through their official ID
- Authenticate organizations entities through business documents along with authentication of ultimate beneficial owners.
- Analyze client risk profiles
- Organizations should take measures of anti-money laundering if necessary.
- Document Verification Process
Essentials of Know Your Customer Laws
Most of the time know your customer regulations are part of anti-money laundering regulators by the recommendation of the financial action task force. Below is a list of know your customer laws implemented around the sphere.
The banking secrecy act of the USA needs the reporting entities, especially banks to take essential measures for customer authentication and to report doubtful activities to FINCEN. Banks or monetary organizations are required to acquire CIP according to the provision of the United States Patriot Act.
The AML Act of France specifies client identity authentication laws for financial organizations.
The money laundering act of the UK describes customer authentication laws for reporting entities.
Earning of crime laundering and terrorist financing acting in Canada requires to know your customer obligations and procedures for reporting organizations.
The anti-money laundering act of Australia executed by the Australian Transaction Reports and Analysis Centre defines the know your customer and anti-money laundering compliance obligations for authentication of individual and organization clients.
Who is required to comply with Know Your Customer Regulations?
Know your customer compliance laws are implemented in a wide range of organizations from different enterprises. Below is a list of similar entities that are entitled to know your customer compliance in most of the authorities that are entitled to know your customer compliance in most of the regulations around the sphere:
- Financial enterprises ( Banks, insurance enterprises, brokerage and mortgage houses)
- Fintech companies include crypto companies, digital loans, online payment solutions, and digital mortgages.
- Real estate sector
- The gaming industry includes e-gaming platforms, lottery businesses.
- Legal sector.
Benefits of knowing your customer compliance
1. Fraud prevention
Prevent fines with rigid know your customer and anti-money laundering screening of clients.
Forgery or stolen identities are utilized by identity thefts to conduct their illegitimate activities anonymously. Organizations and enterprises are targeted for financial gain.
2. Regulatory compliances
Global regulatory authorities are increasing the extent of know your customer and anti-money laundering to diminish money laundering at a worldwide level. Regulatory authorities have the right to impose high fines on the reporting entities in case of non-compliance. Know your customer and anti-money laundering compliance practices help organizations in preventing any such fines.
3. Credibility and Growth
Know your customer and anti-money laundering compliance help enterprises in obtaining credibility and market value. Compliance with regulations helps in obtaining worldwide acknowledgment and market share. On the other hand, know your customer regulations with non-compliance will leave ambiguity for identity thefts that will be exploited by the identity thefts.
Know your customer (KYC) compliance has an enormous impact on how they allow clients to open accounts and perform financial payments on their desirable device.