Financial crimes are increasing at an immense pace. As per the United Nations Office of Drugs and Crime estimates, the global annual money laundering amount is 2% to 5% of the global GDP. This huge increase is a point of concern for regulatory authorities and businesses. Regulatory regimes are becoming more rigid and KYC compliance is becoming vital for businesses.
With evolving global KYC regulations, the biggest concern of businesses is to streamline their compliance processes with customer onboarding. Online KYC screening solutions address multiple concerns of executives planning to implement KYC compliance in their organization.
Becoming KYC compliant requires extensive research. Below is a detailed guide on KYC for businesses around the world.
What is KYC?
Know Your Customer (KYC) is a part of Customer Due Diligence (CDD) regimes. KYC is the process run by businesses to identify their customers’ true identity to access the risk associated with that customer and to check its suitability as a client.
Businesses are required to verify their customers before onboarding them due to KYC and AML regulations. KYC is a layered process that varies according to the risk associated with every client. Basic KYC is the verification of the client’s original identity through name, age, address, ID card, face verification, etc.
The scope of KYC is not limited to the verification of the clients only. Businesses around the globe practice it to verify their merchants, agents, partners, employees, etc. with the change in purpose, it also changes the name of this process and it becomes, Know your Merchant (KYM), Know Your Business (KYB), or Know Your Employee (KYE). But KYC is the most common, and one compact process can be designed to verify the customers, employees, merchants, etc of a business.