KYC (Know your customer/client) is the process of verifying the identity of a customer/user. It helps to prevent financial institutions from being used, by criminal elements for illegal activities. It also enables financial institutions to understand its customers and their financial dealings to serve them better and manage its risks prudently.
KYC procedures are a critical function to assess customer risk and a legal requirement to comply with Anti-Money Laundering (AML) laws. Effective KYC involves knowing a customers identity, their financial activities and the risk they pose.
Financial institutions could face possible fines, sanctions, and reputation damage, if business is done with money launderers and other criminals. Typically, when users onboard or apply for a loan, they are required to upload a selfie, provide their means of identification, utility bill and other documents. These are all KYC procedures.
KYC documents determine a user’s tier. After a user onboards, the user is automatically on tier 1 . As the user provides the other required KYC documents, the tier level is increased.
Reviewing Documents: When a user uploads their KYC documents, you are required to either approve or decline the documents.