What is KYC:
KYC (know your customer) is the check control of your customers. It is a procedure of screening your customer which is the collection of a set of procedures including verifying the identity of the client before or during the time of making business deals. KYC actually ensures more sustainability and lessens the chances of risk so that a healthy business relationship could be maintained.
This procedure also refers to the regulated bank customers, identity verification also refers to practices to assess and monitor customer risk. The KYC process is also a legal requirement intended as an anti-money laundering (AML) measure, refrain from corruption, terrorist funding or any sort of fraud. KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant, and are actually who they claim to be. Banks, insurers, export creditors, and other financial institutions are increasingly demanding that customers provide detailed due diligence information so that risk could be minimised. Initially, these regulations were imposed only on the financial institutions but now the non-financial industry, virtual assets dealers, and even non-profit organisations are liable to oblige.
PROCEDURE OF KYC
KYC procedure includes the following steps
Proof of identity
ID card verification
Face verification
Biometric verification
Proof of address
Document verification ( utility bills , proof of address )
Proof of financial status
Banking details
Transactions details
HOW DOES KYC WORKS:
What happens if KYC is done?
KYC checks are done through an independent and reliable source of documents, data, or information. Each client is required to provide credentials to prove identity and address.
When you get your KYC done, you inform the bank about your identity, address and financial history. This helps banks to ensure that the money invested in it is not for money laundering/illegal activities Ie (terrorist funding, money laundring)
Conclusion: KYC is a procedure which ensures a safe and healthy business environment, which is free from any illicit activity.