How does knowing your customer process work?

Alexandra -

All financial companies use KYC as a set of requirements for identity verification. Thus, banks and crypto exchanges know who is registered on their platform and uses their services.

Let's take a closer look at the verification process.

While it differs from company to company, the purpose is the same – to collect user data.

The check is done automatically, which reduces the time and possibility of errors. After registration, you will be asked to provide a set of documents. Without this, you will not be able to carry out even the simplest operations.

The complexity of KYC depends on the amount you deposit into your account. The procedure is multi-stage, organizations involved in checking official data are involved in it. If your information matches, then the verification is completed, and you have access to all services. This is done to confirm that the person is not involved in financial fraud.

KYC includes:

·      verification of your data – passport or another document;

·      ability to pay (what is the official source of income);

·      possible risks of cooperation – whether the person is involved in illegal organizations, whether sanctions have been imposed on them.

This ensures the safety of every user. The process requires a lot of work and careful processing of many documents. Expect it to check for two weeks or more, it depends on the number of papers that you have submitted for consideration.

The verification includes several levels:

  1. The personality of the client. This includes providing such data about the user as their name, place of residence, and registration. In rare cases, you may be asked for information about the source of income from which you pay taxes. They are transmitted by scanning your passport and other documents.
  2. Biometrics. At some exchanges and banks, you may be asked to provide a photo with a two-page opening of your passport. This is necessary to ensure that your data will not be used by fraudsters. To do this, you can come to a financial institution in person or upload a photo to an online platform. The conditions are set by the company.
  3. Additionally, you need to provide documents of the head and members of the board of directors. The necessary legal aspects will be written separately.
  4. Updating the current data. If your place of residence, surname, and sometimes the place of work change, all changes must be approved by the financial institution. If you fail to do this on time, you will lose the ability to conduct money transactions.

After loading all the papers, you just have to wait for them to go through different systems and databases. These include the bases of the search, involvement in illegal activities, and whether the documents are identified as lost. Most often, there are mixed verification approaches. Before submitting documents, you still need to record a video or take a selfie with your passport.

The results of the check determine your ability of financial transactions on the platform. The level will determine the number of allowed transactions per day and for what amount.