Self-Sovereign ID for KYC and AML
Self-Sovereign ID is essential to know your customer (KYC). In financial services the compliance process is collecting and verifying client identification. Anti-money laundering (AML) application requires correct identification documents. All applications for any financial service require correct, verified identification.
Banks and Insurance companies spend enormous sums on compliance. Self-Sovereign ID will completely solve the waste of time, money and resources by replacing that entire process with one standardized digital solution.
Know your customer (KYC) CIS Template (example)
Know your client guidelines
The know your customer or know your client (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. The procedures fit within the broader scope of a bank’s anti-money laundering (AML) policy.
KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant, and are actually who they claim to be.
Banks, insurers, export creditors, and other financial institutions are increasingly demanding that customers provide detailed due diligence information.
Initially, these regulations were imposed only on the financial institutions but now the non-financial industry, fintech, virtual assets dealers, and even non-profit organizations are liable to oblige.
The objective of KYC guidelines is to prevent businesses from being used by criminal elements for money laundering. Related procedures also enable businesses to better understand their customers and their financial dealings. This helps them manage their risks in a well-judged manner. Today, KYC principles apply to banks as well as different online businesses. They usually frame their KYC policies incorporating the following four key elements;
- Customer acceptance policy;
- Customer identification procedures;
- Monitoring of transactions; and
- Risk management.
The stringent regulatory environment establishes KYC as a mandatory and crucial procedure for financial institutions as well as non-financial institutions. As it minimizes the risk of fraud, by identifying suspicious elements earlier on in the client-business relationship.