How to know your customer: a Check-list for KYC

To protect their interests, and traditional banks, and cryptomerias must comply with the rules, including “Know your customer” (KYC). Tell how to check whether everything is correct in your business.

In the United States for banks was developed a set of rules to combat financial crime — the “Know your customer” (KYC) and “anti money laundering” (AML). The problem is that technological advances and the proliferation of cross-border transactions made ineffective the traditional methods of fulfilling these instructions of the regulator.

Lately a lot of talk about the difficulties in these conditions faced by most financial institutions, and the solutions to these challenges lie in the technological area.

Vetting of clients is often a very expensive procedure, and some banks are spending on compliance with the rules in this area more than $ 500 million annually, because the risk of fraud in this area is very real. Banks have to invest in certain decisions, but it is a very complex area, and often not quite clear what to do.

In a broad sense, the responsibility for proper vetting of customer spread even further and affect more than one side. So, the beneficiaries owning more than 25% of a particular property must follow the same rules.

Thus, the Bank to protect their interests constantly have to pursue a consistent and comprehensive audits. Follow all the rules can be difficult, but our list will help you.

“Know your customer”: a Check-list of 5 items

Step 1. Proceed ahead

Before opening an account the client needs to perform the initial inspection intended to identify any potential problems. It is not necessarily long — for the first insights enough documents confirming the identity and place of residence.

Step 2. Third party services

Yes, in the course of due diligence of the client is necessary to resort to the help of lawyers, auditors and other third parties, but we must remember that the responsibility for the result lies with you, so it is important to carefully choose the contractors — they should share your attitudes and values.

Step 3. Documentation

Quality data is half the battle, so it’s important to have all documentation for inspection in digital form, to keep it up to date and properly protected. Information must be securely stored and be easily available to those who follows it should work.

Step 4. Extended procedure

Sometimes you want to classify the results of inspections and in some cases to take additional actions in relation to clients with a high level of risk. In addition, the diversity of directions of translation, methods of payment and currencies for periodic re-inspections will help to monitor risky transactions.

Step 5. Keep the entries

It is important to care of safe storage of not only current but also past results of the audits — this will help when working with long term clients. In addition, changing the regulation, it probably will have one or the other way to recycle.

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Author: Vitalik

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