How to do a KYC?

Description

KYC (Know Your Customer) is an essential procedure for companies wishing to comply with current regulations. This procedure is also important to protect companies against the risks of fraud, money laundering and terrorist financing. In this article, we explain how to carry out an effective KYC.

Data collection

The first step in carrying out a KYC is to collect the necessary data from your customer. You need to verify your customer's identity and obtain information about their business and professional activity. The following information is generally required:

  • Full Name
  • Address
  • Phone Number
  • Email Address
  • Date of Birth
  • Social Security Number (if applicable)
  • Passport Number (or ID card number)'
  • Company Legal Name'
  • Company Registration Number
  • Company Industry Sector
  • Description of Company's Activity

Data Verification

Once you have collected your client's data, you must verify it. Data verification can be done in various ways, including:

  • Requesting identification documents (passport, ID card, driving license)
  • Requesting proof of address documents (phone bill, electricity bill)
  • Performing electronic identity verification (eID)
  • Using third-party verification services (LexisNexis, Thomson Reuters)

Risk Assessment

After verifying your client's data, you must assess the risks associated with your business relationship with them. Risk assessment is crucial to determine the level of diligence you need to adopt in your business relationship. You can assess risks by considering:

  • The client's country of origin
  • Your client's industry sector'
  • The size of your client
  • Your client's history with your company'
  • Source of funds

Ongoing Monitoring

Once you have completed the initial KYC, you must continuously monitor your business relationship with your client. Ongoing monitoring is vital to detect any unusual or suspicious behavior from your client. You can set up alerts to monitor:

  • Unusual transactions
  • Significant variations in transaction volumes
  • Fund movements to high-risk countries
  • Unusual trading activities

Data Storage

Lastly, you need to securely store the data you have collected on your client. Ensure the data is stored in compliance with current regulations and only authorized individuals have access to this data. Data must be stored for a period defined by current regulations.

In conclusion, KYC is a crucial procedure for businesses wishing to comply with current regulations and protect themselves against risks of fraud, money laundering, and terrorist financing.