It pays to learn more about your customers, so you know exactly who you are working with. This rule applies to all organizations, especially financial institutions, that face real threats like money laundering. One guaranteed method to lower risk is to screen customers through thorough identity verification and assessment. This is where the Know Your Customer (KYC) process comes in.
KYC boasts an array of advantages, one of which is establishing your customers’ identity. You get to understand their financial activities, mainly where their funds stem from and gauge the possibility of money laundering based on monitored activities. As a result, you don’t unwittingly become an accomplice to a federal crime while ensuring utmost institutional compliance.
When carrying out a KYC process, the methods may vary per organization, with some more effective than others. To get the most out of the process, it should always follow the best practices.
Make sure to hit 100% full compliance
Leave no stone unturned when it comes to your secure identity verification KYC process compliance. Start with customer due diligence (CDD), which is integral to the entire process. The goal of CDD is to spare your business from letting a suspicious client into your financial system and flag a suspected account before a problem arises.
CDD encompasses collecting information from customers and relevant sources such as global sanction lists and analyzing them. This happens before onboarding. Active accounts go through the process to gauge the validity of transactions linked to them.