All you need to know about KYC
Know Your Customer or KYC, as it is known widely, activities account for a significant share of costs to banks, financial institutions along with a mammoth task of compliance. KYC registries are global repositories for updated data and corresponding documents. KYC is a necessity across various industries. It provides detailed information about a customer and protects businesses from legal hassles, potential bad debt, and bad publicity.
Challenges in Knowing the Customer
It is a considerable challenge for banks and financial institutions alike to keep track of the ever-changing landscape of KYC regulations. Moreover, they need to strike a balance between resource efficiency and cost management. It is interesting to note that large banks spend time and energy on risk analysis of existing and new clients instead of collecting quality data. On the contrary, small banks demonstrate compliance and transparency by collecting data for the KYC registry and thus strengthening business relationships and lowering the associated costs.
How is KYC regulation implemented?
The KYC process begins with a customer or an employee furnishing all the documents in the KYC checklist to the Human Resource team. The team will then submit the files to a Know Your Customer service provider and the National Identity Documents. A comprehensive report is generated which can be used for making the right onboarding decision. KYC service providers are integral to building trust and mitigating risks at an organizational level. On the contrary, manual Know your Customer processes require physical documents and usually are marred by issues of authentication, data availability, and warehousing. Physical KYC is implemented to learn about a customer’s financial standing, professional records of fraud, transaction history and any association with suspected people.
Transformation in KYC
Service providers are now transforming KYC solutions with authentic data and technology. It has made the process seamless and useful at the same time. Now, businesses can focus on board customers fast and smooth without being exposed to future risks. The use of CRM applications and state-of-the-art account management has made KYC implementation, a hassle-free experience. Robust, practical and highly customizable services are designed to suit the requirements of all industries.
Is the data Safe?
Service providers adhere to a stringent policy of client-company confidentiality and ensure access to data to only authorized personnel. The HR team will be involved in every step of the KYC process and data will be handled sensitively with prior information from the very organization.