KYC (Know Your Customer) - 15 Mints Seminar Notes

KYC (Know Your Customer) - 15 Mints Seminar Notes

 

Know Your Customer Know Your Customer is today a significant element in the fight against financial crime and money laundering, and customer identification is the most critical aspect as it is the first step to better perform in the other stages of the process.

 

TWO COMPONENTS:

•    Identity

•    Address

  

IDENTITY:       

KYC procedures defined by banks involve all the necessary actions to ensure their customers are real, assess, and monitor risks.
These client-onboarding processes help prevent and identify money laundering, terrorism financing, and other illegal corruption schemes.

ADDRESS:

KYC process includes ID card verification, face verification, document verification such as utility bills as proof of address, and biometric verification.

Banks must comply with KYC regulations and anti-money laundering regulations to limit fraud. KYC compliance responsibility rests with the banks.

KYC documents:

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.

In May 2018, the U.S. Financial Crimes Enforcement Network (FinCEN) - added a new requirement for banks to verify the identity of natural persons of legal entity customers who own, control and profit from companies when those organizations open accounts.

Bottom line:

when a corporate company opens a new account, it will have to provide Social Security numbers and copies of a photo ID and passports for their employees, board members, and shareholders.

eKYC
Electronic know your customer:

In India, Electronic Know Your Customer or Electronic Know your Client or eKYC is a process wherein the customer's identity and address are verified electronically through Aadhaar authentication. Aadhaar is India's national biometric eID scheme.

eKYC also refers to capturing information from IDs (OCR mode), the          extraction of digital data from government-issued smart IDs (with a chip) with a physical presence, or the use of certified digital identities and facial recognition for online identity verification. 

Presented by

Prathima

Banking Student 

Magme School of Banking