The Top 10  Most Difficult Countries for Identity Verification

The Top 10  Most Difficult Countries for Identity Verification

Download Report

KYC Checklist: A Comprehensive Guide for Businesses and Financial Institutions

b-img-kyc

In the ever-evolving landscape of finance, having a solid defence against financial crime is crucial. This is where a robust Know Your Customer (KYC) process comes to the rescue, combating fraud in the digital age. However, the advantages of KYC go beyond merely safeguarding your company from criminals. It’s an essential part of Anti-money Laundering (AML) regulations, and failure to abide by these requirements may incur hefty non-compliance penalties.

Diving Deeper into KYC Compliance

“KYC” and “AML” are sometimes used interchangeably, but the KYC process refers to a set of methods businesses may use to enforce compliance regulations such as AML laws. Companies must get to know their clients before and during a business relationship. As a customer can pose various risk levels throughout a business, obtaining extensive information from them is crucial. Thus, the KYC process helps banks and other firms understand the financial habits of their clients and swiftly detect illicit activity. 

Know Your Customer Checklist: Which Documents Are Needed?

The first step in online KYC verification is checking customers are who they say they are. To validate their identity, businesses need some standard documents, such as:

  • A government-issued identity card
  • Proof of Address (PoA), such as utility bills 
  • Official letter from a public servant or public authority
  • Bank passbook with a photograph
  • Bank passbook with a photograph
  • Voter’s ID card
  • Employee ID card
  • Passport
  • Driver’s licence
  • Board of Education or university card

In addition, your company has to stick to Know Your Business (KYB) standards. Corporations must confirm the legitimacy of the company they are dealing with and have knowledge of their Ultimate Beneficial Owners (UBO), business registration number, and its incorporation details.

Know Your Customer Checklist: What are the Procedures Needed?

With fraud rampant in the digital world, conducting efficient KYC is crucial to mitigate the risk of identity theft, data breaches, and other crimes. 

A robust KYC programme must include the following:

1. Customer Identification Program (CIP)

A CIP seeks to verify customers and ascertain that their funds come from authorised sources whenever any client opens an account. Otherwise, financial criminals could readily exploit your company to launder the proceeds of unlawful activities. The CIP usually occurs during the client’s onboarding procedure for people and corporations. 

According to Section 326 of the USA PATRIOT ACT, it must contain the following information:

  • A written document of the programme
  • Four pieces of identifying information that includes the client’s name, Date of Birth (DoB), address, and government-issued identification numbers
  • ID verification procedures
  • Bookkeeping
  • Cross-matching with government lists
  • Customer notice for subsequent steps

The business must ensure that all customer data and records are genuine. Employing security measures, like two-factor authentication and biometric verification, when authorising clients to access accounts online is crucial to ensuring that users are who they claim to be. Customers’ finances must be traced back to their source, and high-risk sources—like cash-based enterprises, people who are politically exposed, and foreigners—must be monitored appropriately

2. Customer Due Diligence (CDD)

According to the Financial Crimes Enforcement Network (FinCEN), the CDD Final Rule mandates financial firms to enforce and maintain written policies facilitating the following:

  • Identify and verify the identity of customers.
  • Identify and authenticate the UBOs of the new company.
  • Design customer risk profiles according to their business’s nature.
  • Conduct ongoing monitoring to check and report suspicious transactions. Moreover, perform risk assessments to ensure that customer information is up to date.

This stage requires businesses to investigate customers’ past criminal activity and any suspicious behaviour to check the risk they may pose. Since FinCEN does not specify risk levels, your organisation must develop its own standards for identifying risk profiles.

b-info-high

There is no one-size-fits-all approach to customer due diligence. Businesses use three different types of CDD to assess consumer risk:

  • Businesses perform simplified due diligence when the customer poses a low risk. They just check the client’s ID and don’t need to conduct further verification.
  • Standard Due Diligence (SDD) is carried out when a client poses a medium risk in which the customer’s ID is checked, and their identity is further verified through a government database.
  • High-risk customers such as those on Politically Exposed Persons (PEPs) lists, sanctions lists, and watch lists undergo Enhanced Due Diligence (EDD). Besides acquiring Personally Identifiable Information (PII), the process also needs comprehensive details from the clients, like their source of money, the purpose of transactions, etc.

    3. Ongoing Monitoring

Scammers are constantly developing new ways to avoid being caught, making ongoing monitoring necessary for businesses. What skilled money launderers do is that they keep things legal for a while before using their account for illicit purposes. Thus, a standardised strategy for detecting changes in risk should be a part of ongoing monitoring. Even though high-risk clients might be conducting their business wholly lawfully, AML requirements demand monitoring them tightly. You can’t perform enhanced due diligence on everyone because some low-risk clients can engage in unethical financial behaviour. Companies must keep customers happy while also spotting suspicious activities.

Who Can Benefit from a KYC Document Checklist?

  • Business Owners: Knowing your customers is crucial for business owners. This is where a KYC CDD checklist is needed that helps you assess any risks of doing business with specific clients.
  • Accountants: Transactions involving money carry high risks; getting all relevant details about a customer is essential to evaluate potential threats.
  • Financial Service Providers: Financial advisors are legally required to know who they are dealing with. They must verify customer information to mitigate the risk of money laundering and other financial crimes.

How Does Shufti Connect the Dot for Your Business?

Shufti offers an AI-powered KYC solution that onboards customers in 230+ countries and supports 150+ languages. The robust identity verification solution helps businesses meet regulatory mandates and mitigate the risk of fraudulent activity whilst offering a great customer experience.

Still, have any questions about an efficient KYC process?

Talk to a KYC expert

Related Posts

Blog, Financial Crime / AML

AMLD5 Amendments in Prepaid Cards Transaction Threshold

In July 2018, the European Commission came into effect the 5th Anti-Money Laundering Directive (A...

AMLD5 Amendments in Prepaid Cards Transaction Threshold Explore More

Blog

Fighting Financial Crimes and Securing Gambling Services with Shufti’s AML Screening Solution

Historically, the measures to curb money laundering and terrorist financing had only been only im...

Fighting Financial Crimes and Securing Gambling Services with Shufti’s AML Screening Solution Explore More

Blog

European Payments Initiative Calling for IDV Solutions

The rise in the popularity of Visa and Mastercard in Europe, both US-headquartered companies, was...

European Payments Initiative Calling for IDV Solutions Explore More

Blog

ICOs blocking investors from USA and China – Why and How?

Initial Coin Offerings, more commonly known as ICOs, are all the rage in modern day financial wor...

ICOs blocking investors from USA and China – Why and How? Explore More

Blog

Debunking the Top 5 Misconceptions about KYC Compliance

Know Your Customer (KYC) compliance suffers from the issue of unintentional secrecy. Businesses h...

Debunking the Top 5 Misconceptions about KYC Compliance Explore More

Blog

Know Your Investor (KYI)- Ensuring Seamless Investor Onboarding for the Investment Industry

With global stock markets skyrocketing, the wealth, asset and investment sector is under growing ...

Know Your Investor (KYI)- Ensuring Seamless Investor Onboarding for the Investment Industry Explore More

Blog

On-Premises Identity Verification – A Solution to Prevent Data Breaches

From virtual modes of communication to digitised solutions for operating efficiently, the perks o...

On-Premises Identity Verification – A Solution to Prevent Data Breaches Explore More

Blog, Online Marketplace

KYC for customer on-boarding in Telecommunications Industry

Identity Verification is quite necessary for Telecommunications Industry in today’s digital...

KYC for customer on-boarding in Telecommunications Industry Explore More

Blog

The Crucial Role of Digital Onboarding and Ongoing KYC Monitoring

In this digital world, users expect convenience, speed, and greater security. Businesses that off...

The Crucial Role of Digital Onboarding and Ongoing KYC Monitoring Explore More

Blog

Healthcare is the New Target of Criminals – What’s the Solution?

The healthcare sector has been facing many challenges due to coronavirus pandemic. Cybercrimes ha...

Healthcare is the New Target of Criminals – What’s the Solution? Explore More

Blog

How ID Verification Helps in Fighting Digital Scams?

ID VERIFICATION: Digital scams are common phenomena and it affects all types of businesses in eve...

How ID Verification Helps in Fighting Digital Scams? Explore More

Blog

Fraud Prevention – Challenges, Strategies, Best Practices, and Technologies

The twenty-first century is by far the most revolutionary time in the history of humans in terms ...

Fraud Prevention – Challenges, Strategies, Best Practices, and Technologies Explore More

Blog

Implementation of AML compliance – Challenges and fundamentals

With the advancement in security controls, financial businesses are becoming fraud and stress-fre...

Implementation of AML compliance – Challenges and fundamentals Explore More

Blog

Digital KYC – Protecting All Generations from ID Fraud

From baby boomers to Gen Z, identity fraud is the problem of all generations. Studies suggest tha...

Digital KYC  – Protecting All Generations from ID Fraud Explore More

Blog

10 High-Risk Jurisdictions for Money Laundering According to FATF

Innovations like stablecoins and non-fungible tokens (NFTs) created quite the hype in the past ye...

10 High-Risk Jurisdictions for Money Laundering According to FATF Explore More

Blog

Significance of Facial Recognition Technology in FinTech Fraud Detection

Compliance with Anti-Money Laundering (AML) requirements is challenging for financial organisatio...

Significance of Facial Recognition Technology in FinTech Fraud Detection Explore More

Blog

Fintech Compliance – Boogeyman for Trillion Dollar Industry?

Fintech industry is flexing its muscle by bringing onboard more and more customers and innovating...

Fintech Compliance – Boogeyman for Trillion Dollar Industry? Explore More

Blog

Top 5 Trends to Revamp the Online Gambling Industry in 2022

In recent times, the online gambling sector has demonstrated continuous growth along with technol...

Top 5 Trends to Revamp the Online Gambling Industry in 2022 Explore More

Blog

Blockchain and Identity Theft: Potential Challenges and how to Tackle Them

Blockchain has become increasingly popular because of its potential to provide secure transaction...

Blockchain and Identity Theft: Potential Challenges and how to Tackle Them Explore More

Blog

Card-Not-Present (CNP) Fraud – How to Prevent False Chargebacks?

The eCommerce industry continues to grow rapidly, so are fraudulent activities. According to Stat...

Card-Not-Present (CNP) Fraud – How to Prevent False Chargebacks? Explore More

Blog

FATF October 2019 Plenary – Here is What You Need to Know

Financial Action Task Force (FATF) President Xiangmin Liu, chaired the first meeting from 16-18 O...

FATF October 2019 Plenary – Here is What You Need to Know Explore More

Blog

Forensic Document Verification Solutions – A Key Step in Eliminating Identity Fraud

With emerging technologies, the demand for online services and products is skyrocketing, raising ...

Forensic Document Verification Solutions – A Key Step in Eliminating Identity Fraud Explore More

Blog

A Year In Review of the FinTech Industry [2021 Update]

The FinTech industry is soaring with a record of $91.5 billion in global funding so far this year...

A Year In Review of the FinTech Industry [2021 Update] Explore More

Blog

Building Trust in Health and Telemedicine Services With Shufti’s Facial Biometric Verification Solution

Telecommunication technology in the healthcare industry is already widely used and is expanding t...

Building Trust in Health and Telemedicine Services With Shufti’s Facial Biometric Verification Solution Explore More

Blog

Facial Recognition Technology Pioneered at Olympic and Paralympic Games Tokyo 2020

Facial recognition has grown by leaps and bounds with the arrival of the sophisticated pattern-ma...

Facial Recognition Technology Pioneered at Olympic and Paralympic Games Tokyo 2020 Explore More

Blog

Anti-Money Laundering Screening – Enabling Financial Institutions to Handle Suspicious Activities

Financial crime is becoming a global concern, yet it’s often tough to spot. That is why gov...

Anti-Money Laundering Screening – Enabling Financial Institutions to Handle Suspicious Activities Explore More

Blog

7 Fascinating Facts about Face Verification Technology

Technology is a fundamental part of our day-to-day lives, from checking the weather and connectin...

7 Fascinating Facts about Face Verification Technology Explore More

Blog

Safeguarding Financial Operations with Transaction Monitoring and AML Screening

To enhance the power of anti-money laundering regulation, transaction monitoring systems have evo...

Safeguarding Financial Operations with Transaction Monitoring and AML Screening Explore More

Biometric Technology, Blog

4 Reasons why Facial Recognition is Better at Biometric Verification than Fingerprint Scans

Biometric verification is smartphones was introduced nearly five years ago when iPhone launched i...

4 Reasons why Facial Recognition is Better at Biometric Verification than Fingerprint Scans Explore More

Blog

Identity Verification – Safeguarding Pharmaceutical and Controlled Substance Sales

With emerging technologies, the pharmaceutical industry has transformed significantly, and rapid ...

Identity Verification – Safeguarding Pharmaceutical and Controlled Substance Sales Explore More

Blog

Document Authentication | Streamlining Onboarding, Compliance & Fraud Prevention

Before the world experienced digitisation due to the advent of smartphones, fast-speed internet, ...

Document Authentication | Streamlining Onboarding, Compliance & Fraud Prevention Explore More

Blog

The Importance of Online Address Verification in E-Commerce

The rise of digitisation has given hackers more means to surpass security systems and conduct hig...

The Importance of Online Address Verification in E-Commerce Explore More

Blog

International Tax Body to curb Cryptocurrency based Tax Evasion

Tax enforcement authorities from Australia, Canada, the Netherlands, the United Kingdom and the U...

International Tax Body to curb Cryptocurrency based Tax Evasion Explore More

Blog, Identity & KYC

Digital Document Verification Giving Wing to Recruitment Sites

Document Verification: In an industry that’s all about people, it’s critical that you know that a...

Digital Document Verification Giving Wing to Recruitment Sites Explore More

Blog

Video KYC – Answer to Digital Revolution in the Gulf Region & UAE

The digital revolution in the Gulf region and UAE has been a hot topic these days. The economic d...

Video KYC – Answer to Digital Revolution in the Gulf Region & UAE Explore More

Blog

From Fraudsters to Artists – The Dire Need of AML Compliance for NFTs

Over the past few years, NFTs or Non-Fungible Tokens have become popular in the crypto sector. Ac...

From Fraudsters to Artists – The Dire Need of AML Compliance for NFTs Explore More

Blog, Online Marketplace

ID Verification Ensuring Safety Deals in Real Estate Sector

Buying and selling properties for people are major, thought-provoking decisions. It requires week...

ID Verification Ensuring Safety Deals in Real Estate Sector Explore More

Blog

ID Verification for High-Potential Digital Fraud Cases

Instances of digital frauds and payment scams are highly damaging for banks and financial institu...

ID Verification for High-Potential Digital Fraud Cases Explore More

Blog

What are chargeback frauds and what do they mean for businesses?

The world we live in no longer seems to be honest and fair. A large number of individuals are par...

What are chargeback frauds and what do they mean for businesses? Explore More

Blog, Identity & KYC

Which KYC Documents are Required for Customer Verification?

Name, Rank, Brigade, and Serial Number. That’s the only information military organizations across...

Which KYC Documents are Required for Customer Verification? Explore More

Blog

5 Frauds in the Education Sector and How They Can be Prevented

Educational institutions have become an attractive target for cybercrime attacks in recent years....

5 Frauds in the Education Sector and How They Can be Prevented Explore More

Blog

KJM Age Restrictions Breaking New Grounds for Gaming Industry

Minor protection has become a challenge for everyone these days. Parents are worried about the ty...

KJM Age Restrictions Breaking New Grounds for Gaming Industry Explore More

Blog

The Advantages of Know Your Business (KYB)

Know Your Business (KYB) policies are a recent innovation in the field of fraud prevention. Since...

The Advantages of Know Your Business (KYB) Explore More

Blog

NFC Verification – Making Digital Payments Mainstream from Alternative

With time, payment methods have evolved from coins to paper-based money, then plastic, and now sm...

NFC Verification – Making Digital Payments Mainstream from Alternative Explore More

Blog

Top 5 Trends to Revamp the Online Gambling Industry in 2022

In recent times, the online gambling sector has demonstrated continuous growth along with technol...

Top 5 Trends to Revamp the Online Gambling Industry in 2022 Explore More

Anti Money Laundering, Blog, Business Technology, Financial Crime / AML, Fraud Prevention, Identity & KYC

Initial CCPA Compliance Costs Could Hit $55 Billion: Report

According to an economic impact assessment prepared for the state attorney general’s office by an...

Initial CCPA Compliance Costs Could Hit $55 Billion: Report Explore More

Blog

5 Reasons to Invest in Intelligent Character Recognition Services

Businesses deal with a plethora of documents, ranging from accounting and finance to sales and ma...

5 Reasons to Invest in Intelligent Character Recognition Services Explore More

Blog

Warning Signs of ICO Scams and the Role of Identity Verification Service

If you have heard of Bitcoins and cryptocurrencies then you must have heard of ICOs or Initial Co...

Warning Signs of ICO Scams and the Role of Identity Verification Service Explore More

Blog

Identity Verification Services — Fueling the Demand for Safe Gaming Experience

Modern gaming is the most recent evolution of online games that has enchanted gamers across the g...

Identity Verification Services — Fueling the Demand for Safe Gaming Experience Explore More

Blog

April 2023 Recap: Major AML Fines and Key Events

With the world embracing digital transformation, scammers have adopted sophisticated strategies t...

April 2023 Recap: Major AML Fines and Key Events Explore More

Blog

Building an Effective Customer Due Diligence (CDD) System with Shufti

There are various factors that businesses have to consider while implementing measures to gather ...

Building an Effective Customer Due Diligence (CDD) System with Shufti Explore More

Blog

Risk Assessment: Building Trust in Crypto Exchanges

Other than following AML and KYC laws, crypto exchanges have a huge responsibility on their shoul...

Risk Assessment: Building Trust in Crypto Exchanges Explore More

Blog

A 2024 Overview of Identity Document Forgery

As technologies like artificial intelligence and machine learning have advanced, they have signif...

A 2024 Overview of Identity Document Forgery Explore More

Blog

UAE Government Stepping Up Against Prevalent Crimes

The UAE is known for being home to flourishing businesses and providing a significant level of fi...

UAE Government Stepping Up Against Prevalent Crimes Explore More

Blog

6 industry experts explain the role of KYC in cybersecurity

Cybersecurity is no more limited to firewalls and antiviruses. It is protecting your system, empl...

6 industry experts explain the role of KYC in cybersecurity Explore More

Blog

Avoid Non-Compliance Fines with AML Transaction Monitoring

Cybercriminals in the realm of fraud and financial crime are constantly revising exploitation met...

Avoid Non-Compliance Fines with AML Transaction Monitoring Explore More

Blog

Top 5 Reasons Why Businesses Need Transaction Monitoring Solution

Companies are moving towards digitisation, meanwhile, cybercriminals are mastering the art of exp...

Top 5 Reasons Why Businesses Need Transaction Monitoring Solution Explore More

Blog

The Most Common Use Cases of Identity Document Verification

As data breaches and other crimes increase, regulators must impose strict rules that corporations...

The Most Common Use Cases of Identity Document Verification Explore More

Blog

Identity Verification – Combating Fraud in the Telecommunication Sector

Developing technology, rapid growth in digitization, and increased use of digital transactions ha...

Identity Verification – Combating Fraud in the Telecommunication Sector Explore More

Blog

A Brief Insight into Safe Havens for Russian Oligarchs

The recent Russia-Ukraine conflict has sparked the West to impose sanctions targeting the Russian...

A Brief Insight into Safe Havens for Russian Oligarchs Explore More

Blog

Know Your Players: Why KYC is Necessary for Gaming and Gambling

The post-COVID-19 era has witnessed a remarkable surge in the e-sports and gaming sectors. This t...

Know Your Players: Why KYC is Necessary for Gaming and Gambling Explore More

Blog

Know Your Investor | Understanding Which Investors to Onboard

Investor onboarding is regarded as one of the most critical stages of the business’s lifecy...

Know Your Investor | Understanding Which Investors to Onboard Explore More

Blog

Difference between KYC and AML

The growing Fintech industry leads to an increased demand for KYC and AML compliance requirements...

Difference between KYC and AML Explore More

Blog

What to expect from Booming Identity Verification Market in 2020?

Technologies hatched by fourth industrial revolution such as the Internet of Things (IoT), roboti...

What to expect from Booming Identity Verification Market in 2020? Explore More

Blog

Understanding Digital Identity

What is Digital Identity? In the digital world, your identity is made up of your p...

Understanding Digital Identity Explore More

Blog

Top 5 Countries Impacted by Money Laundering – How Shufti Helps Mitigate the Risks

Today, money laundering has permeated almost every regulated market and has become the most occur...

Top 5 Countries Impacted by Money Laundering – How Shufti Helps Mitigate the Risks Explore More

Blog

Video KYC: Taking Traditional KYC to the Next Level

Know Your Customer (KYC) has undergone continuous evolution since its inception. Its purpose is t...

Video KYC: Taking Traditional KYC to the Next Level Explore More

Blog

Video KYC Verification – Reimaging Customer Onboarding in 2023

As technology is advancing so do fraudsters, ringing security alarms for financial businesses and...

Video KYC Verification – Reimaging Customer Onboarding in 2023 Explore More

Blog

Analyzing the UK and US Gambling Industry by Numbers

Businesses and people in the gambling sector are aware of the risks involved and what are their p...

Analyzing the UK and US Gambling Industry by Numbers Explore More

Blog

Securing Instant Money Transfers in the Banking Sector – EPC’s New Rulebook

Financial services have always played a vital role throughout the entire history of advanced huma...

Securing Instant Money Transfers in the Banking Sector – EPC’s New Rulebook Explore More

Blog

Video KYC in 2024 | A Step Towards Digital Evolution

The striking surge in theft and fraud through digitisation is a growing concern for many business...

Video KYC in 2024 | A Step Towards Digital Evolution Explore More

Blog, Identity & KYC

GDPR versus Identity Verification – Are you Ready?

If you are an organisation that is based in the EU or are doing business with companies in the EU...

GDPR versus Identity Verification – Are you Ready? Explore More

Take the next steps to better security.

Contact us

Get in touch with our experts. We'll help you find the perfect solution for your compliance and security needs.

Contact us

Request demo

Get free access to our platform and try our products today.

Get started