Know Your Customer (KYC) will be a great thing when it works

‘Know Your Customer’ or KYC term refers to the necessary procedures that need to be considered to ensure a trustworthy, reliable and safe relationship between a customer and a financial institution.  

Since there are many unethical transactions taking place all over the world, which includes illegal activities like fraud and money laundering, KYC was introduced with an aim to work towards the prevention of illegal activities between a financial institution and its customers. KYC is not only limited to banks and financial institutions but it is also important to the sectors like retail, ecommerce and Fintech companies which are now slowly adapting to the changes brought in by the KYC norms.

These clients could either be individuals or businesses, depending on the nature of the business.

The benefits of KYC in the global market

KYC is permitted to provide a safer relationship between the relevant financial provider and businesses, all over the world. These businesses must remain ethical in order to obtain any financial support from such financial institutions. Identity verification, which is one of the most prominent features within the KYC norms, has become a huge step to reckon with. Its dependence does not negate the fact that it is an important segment worth following.

KYC refers to the reliability of knowing who you’re dealing with, with respect to your customers; its efforts are aimed at establishing the identity of customers, assess money laundering, gauge risky customers as well as monitor customer activities. This is not all, for KYC is also useful when it comes to gathering more knowledge about the nature of the customer’s activities. KYC is an added source of compliance and safety that allows elimination of illegal activities from all industries, including retail, banking, and ecommerce companies.

Why KYC is an essential tool which can impact industries in a positive manner?

Know Your Customer is a great idea and since it’s a source of providing reliability. It ensures financial safety when it comes to client confidentiality and maintenance. KYC, as a practice, is still being perfected and is in a very nascent stage. Even though it has a promising future, it will take industries, such as banks and other financial institutions, a lot of time to implement and get used to the nuances of the different rules and regulatory requirements.

3 Reasons why will KYC make everything better

  • In the new Fintech era, Global organizations need to implement smarter, simpler fraud prevention and KYC processes to improve the customer experience while protecting corporate assets. The answer here is Electronic ID verification. Know Your Customer documentation for authenticity purposes can range from one’s passport to banking documents to utility bills and bank statements. With the help of bank statements, all bank transfers can be tracked, which allows avoidance of money laundering.
  • KYC allows information to remain up to date and relevant, which provides verification of identity documentation to reflect any changes. If any changes are made in the mandatory documents, financial institutions can immediately seek help and make changes accordingly.  
  • Even though KYC has opened a whole new platform of customer friction, it’s far better to know who your customers are and what they’re up to when it comes to illicit trading or business activities. KYC is considered to be an essential part of maintaining a trustworthy corporation, thereby remaining compliant at all times.

About Melissa

Since 1985, Melissa has specialized in global intelligence solutions to help organizations unlock accurate data for a more compelling customer view. For more information on eKYC and AML please visit

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