Know Your Customer- Essential KYC Documents Required for Verification


In today’s world where everything has shifted to digitization, it has brought responsibility for ethical conduct while doing business or making transactions with financial institutions. With the emergence of risk in technology-oriented day-to-day operations, it is mandatory to know your client before taking them on board. This perspective of cautious lookout brought the concept of KYC (Know Your Customer). This is due process carries out by financial institutions to evidently authenticate an entity. This process involves the verification of certain documents which comprise personal and other relevant information of a client as per the requirement of an organization. There are organizations that specialize in this field of technology by providing state-of-the-art validation services.

Types of KYC Verification

In-person verification 

In this process, the bank demand individual to appear physically for validation. For instance, when senior receives pension certificates, they require to show themselves at the institution so that the bank could ensure that the certificate is not misuse by anyone to take the money. 

Digital Verification

As the term speaks, digital verification performs virtually, but in this scenario, there are means to ascertain that the actual entity is validating itself and nobody else. For example, in digital verification, Video KYC analyzes customers through video KYC which supposes to be a show real-time presence.

KYC Document Verification

KYC involves different verification processes. For instance, document verification, address verification, phone verification, etc. we will be discussing important verification documents that banking institutions require for verification purposes in different scenarios to get a clear picture of what their clients do and who they are. 

ID Verification

While ID verification, the AI system of verification services analyzes the accuracy of spellings, exact name, the font, format, and pattern of the name. In some regions name is written as first, middle, and last name whereas, in some regions of the world, the name shows as a full name. Moreover, hologram, image quality, image texture, and skin density are also taken into consideration. For ID verification, the passport of an individual is checked to identify if it is expired or not. Also, it allows the bank to verify if the person is residing in a country legally that is other than his home country. Credit/ Debit card checks to evaluate the nature of activities performs financially so that any unusual or suspicious activity is filter out in case it exists.

Address Verification

In the process of due diligence, KYC also requires address verification. In this case, the banking institutions usually require utility bills. The purpose of asking for bills is to check the authenticity of an individual about whether he has a residence that he claims to have or not. Because it will give information about the exact location. In another case, if the person is on rent, then the bank will demand a rent agreement to ensure that the entity is really a tenet and is not escaping any obligations of a permanent resident like Property Tax.

In the case of big business entities to be validated, the KYC process is carried out more critically because these types of clients are subjected to the suspicion of being scammers or fraudsters. Thus, the authorities of financial institutions tend to be more detailed in this context.

Background Checks

Financial institutions analyze the names of businesses in the legally identifies global lists such as warning lists, black lists, etc. the business demands to submit its main documents which comprise the Memorandum of Association to verify the validity of its existence. Furthermore, if a business entity appears to be in any of the warning lists, the verification deems it as failed.   

Age Verification

Age verification analysis Date of Birth which is usually provided on the ID card. It is usually requires for making sure that a person is legally allow to take on employment or admission in an academic program. For instance, some countries do not allow a person to enroll in Ph.D. if he or she is above the age of 30. Thus, age verification gives the liberty to evaluate an individual for employment eligibility as well as for pursuing an academic degree.

Final Verdict

KYC documents have proved to be a useful tool to scan an entity for its transparency before a financial institution takes it on board. Because following this practice not only strengthens customer credibility but also saves the bank from the risk of fraud that may lead to damaging its reputation and compromising its goodwill otherwise. On the other hand, it also improves customer experience by promoting a safe environment. Accuracy of the information, as well as the entity, fosters trust-based relationships for both parties. 

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