What is KYC?

1. What is KYC? - All You Need to Know KYC Meaning If you’re wondering about ‘what is KYC’, KYC’s full form stands as ’Know Your Customer.’ KYC verification is a process of identifying and verifying a customer’s identity. This is to ensure that customers are who they say they are. Essentially, KYC definition states, “A due-diligence process to establish a client’s identity through KYC documents including photo IDs, proof of address and in-person verification.” The company may refuse to deal with a client if they fails to meet KYC compliance requirements. For instance, clients of a banking or financial institution have to submit KYC documents and get verified prior to opening a bank account or investing in securities.

2. What is KYC in Banking? A question, 'what is KYC in banking’ is brimming the browsing history of many. KYC in banking also refers to Know Your Customers or Know Your Clients. It is a process every financial institution must conduct to verify identities of clients before processing the transaction. It is a way to assess potential risks and prevent themselves from money laundering and other illegal activities. As per KYC regulations mandated by the government, every financial institution or company dealing in financial transactions must perform the KYC process for all clients. KYC checks are done to authenticate the identity of clients in compliance with KYC regulations. The key objective of KYC compliance is to reduce illicit activities such as money laundering, terrorism financing, and more. It further helps banks to safeguard customers’ data by providing services in a secure, effective way.

3. What does KYC Process Include? As you well know 'what is KYC,’ let’s resolve how KYC verification works. KYC process is conducted by collecting customers’ personal information, extracting data from government-issued ID proofs uploaded by customers, and validating, verifying the same. An effective KYC verification can be performed by: 1. Customer Identification Program (CIP) 2. Customer due diligence 3. Ongoing monitoring •Customer Identification Program (CIP) - WEF Patriot Act, CIP mandates identity verification of clients to prevent fraud, terrorism financing, and other illegal activities. •Customer due diligence- CDD ascertains the identity of a customer, determines the purpose of the financial transaction, monitors financial activities, and mitigates the risk involved. •Ongoing monitoring- Periodical customer checks enable risk assessment and prevents financial as well as reputation damage. KYC Documents Comprises of What?

4. The following KYC documents are required for identity verification process. Users supply bank account data, social security numbers, and more to fulfill the KYC requirements of banks. They may also submit proofs of identity like utility bills and passports. ID proof documents •Social security card •PAN card •Passport •Driving License •Voter ID card •Credit cards / debit cards •ID card with applicant’s photo issued by central / state government •Identity document issued by statutory / regulatory authorities •Employee ID card of a listed or public sector company Address Proof •National ID card •Ration card •Passport •Driving license •Utility bills •Voter ID card Income Proof •Salary slips •Income tax returns •Bank statement / bank passbook What Are the Types of KYC? The KYC process is performed in two ways. An individual can opt for any based on his / her convenience. 1. eKYC / Aadhar Based KYC: eKYC or electronic Know Your Customer is a process wherein identity verification is performed online by scanning and extracting users’ personal information from government-issued IDs. This

5. online KYC means include biometric verification, liveness detection, and more. eKYC is also known as Aadhar based KYC. 2. In-Person KYC: In-Person, KYC verification includes authentication of the client’s identity in person. The customer is required to visit a KYC kiosk or mutual fund house and get verified using official KYC documents. A few companies also verify their customers via video call where the client is needed to display their government-issued IDs. Why is KYC Important? The increasing cases of illicit activities including money laundering, identity theft, and fraud makes KYC verification a vital process. Non-compliance with KYC regulations may result in hefty purposes, penalties, sanctions, and reputational loss. Identity validation, facial recognition, document authentication, and biometric verification offered by the KYC process combats fraud and safeguards companies from data breaches and illegal activities. Therefore, KYC compliance is essential for companies to monitor customer behavior and mitigate risks associated with them. How to Choose the Right KYC Provider? •Does the KYC solution cover everything you need? Does it support multiple languages? Does it adhere to country-specific KYC regulations? Is it technologically advanced? Is it secure, convenient? •Your requirements may just include identity verification or a comprehensive suite of ID verification solutions including KYC, AML, and fraud prevention. Choose the service provider that suits your needs best. •Ensure your KYC provider has convenient, hassle-free integration that is effective as well as efficient. This could be possible if the identity verification service provided by the company integrates AI, biometrics in its API. •Opt for the one that makes your customer onboarding process secure, convenient, and quick.

6. IDMERIT: A Perfect KYC Solutions Provider IDMERIT, a US-based identity verification company provides the most reliable suite of identity verification solutions across the world. This global identity verification service provider offers effective KYC solutions to verify customers without adding any friction. With IDMscan, it can verify and authenticate users in real-time. It helps you maximize your matches with over 400+ data sources globally. Integrate your system with IDMscan and mitigate risk, preventing identity theft seamlessly.