Importance Of KYC Process & List Of Required KYC Documents For Successful Verification

About KYC

KYC is the abbreviation for Know Your Customer. It is an important process through which companies or organizations can rightfully verify the personal information of their potential or existing clients. Through the KYC documents list, these institutions can authenticate the accuracy of the information before deciding to offer their services.

Know Your Customer is an extremely popular verification process among banks and other financial institutions and it is slowly being accepted in the eCommerce and telecom industry. KYC has helped a lot of companies and organizations decrease cybercrime and typical fraud cases.

Nevertheless, the manual KYC process is time-consuming and expensive. The online KYC or eKYC process has also become an extremely popular option for companies to complete the customer verification process. eKYC is a cost-efficient option and with the help of technology, the entire digital KYC process has become efficient, quick, and worthwhile.

With an automated KYC, you will be able to provide an effortless onboarding process to both your existing and new clients as a service provider. There will be extremely fewer manual errors and it will be less capital-intensive for organizations.

What is the importance of KYC?

As mentioned earlier KYC is especially important for both banks and financial institutions because through KYC they can make sure that their clients are real and evaluate the monetary risk involved before offering them services. It is an extremely efficient customer-onboarding process that can restrict as well as pinpoint illegal schemes, financial terrorism, corruption, money laundering, etc.

A KYC process has face verification, biometric verification, identity card verification, and multiple document verification (such as address proof). Banks and financial institutions have to respect the KYC regulations implemented by different countries to reduce and limit fraudulent activities.

Furthermore, failure to comply with KYC compliance has major consequences. For example, heavy penalties can be implemented on the bank that has refused to abide by KYC compliance. From 2008 to 2018, 26 billion dollars in fines were accumulated throughout the Middle East, United States, Asia Pacific, and Europe which were related to non-compliance with KYC.

KYC documents list for verification

Although different governments have different opinions on the KYC documents list, all of them require two distinct categories of documents. The two separate document categories are documents related to proof of identity and documents related to proof of address.

KYC documents list for proof of Identity

To evaluate the proof of identity of any individual the KYC documents list requires five separate documents which are regarded as OVD or Officially Valid Documents:

  • A universal identity card issued by the respective government
  • Voting identity card
  • Passport
  • Tax identification card
  • Driving license

KYC documents list for proof of address

  • Bank statement of the individual attested by the branch manager
  • Tax bills such as property tax, ownership receipt, etc
  • Duly attested rent agreement
  • An official letter from the employer stating the employee’s official residential address
  • Any kind of utility bills such as electricity bills, water bills, telephone bills, etc.

To conclude

As a customer or applicant, if you have all the necessary and sufficient KYC documents list required to finish the KYC verification, you can surely expect an effortless onboarding process and look forward to avail of the services of banks or any other financial institutions.

Furthermore, banking sector companies or financial service providers should opt for online KYC verification processes to increase the preciseness and pace of their services. With online KYC, as a company, you will be able to easily authenticate the identity of the client while measuring their risk status at the same time.

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