KYC COMPLIANCE SERVICE PROVIDERS FOR BRINGING BETTER CUSTOMER COMPLIANCE FOR YOUR BUSINESS
Customer compliance is what that reaps the most in coming up with a legal business today. With the rise in financial crimes day to day, there comes an increasing demand for businesses KYC compliance service providers to following the necessary regulatory regimes to make them rigid against the money laundering risks and some other frauds.
Business statistics have revealed that global money laundering rates have got its rise right from 2% to 5%. It is really shocking and it shows us the threat that the present industry is prone to face. Hence, it should be kept under control; else it could be a major point of concern for the businesses and regulatory authorities.
Well, how can we do it?
Yes, it can be possible only when every entrepreneur knows the need for regulatory regimes like KYC and AML.
The advent of KYC dates back to the year 1970. With the introduction of KYC, many regulatory bodies were known to implement effectual KYC techniques for their business prospects both on the regional as well as international perspectives.
KYC stands for ‘know your customer’. It is an efficient identity verification practice done by businesses to assess the extent of risk that a customer holds. It has been in the industry since a long time ago due to the increased operational risk of the financial sector.
It is not just about a simple concept that gives rise to a one-time practice. Instead, it is a chain of processes with a variety of aspects. It generally starts with CIP and it is broadly classified as basic KYC and enhanced KYC. Customers with a low-risk profile are entitled to pass the basic KYC procedure. Whereas, enhanced KYC is needed in cases of profiles with high risks.
CIP is nothing but the customer identification program, through which a detailed verification is done for every single transaction made by a customer. It holds the overall details of the customers’ right from their profiles to the verification strategies.
Most of the countries today have designed their own regulatory frameworks to implement KYC and AML.
Uses of KYC compliance services:
- Risk reduction:
Some of the common scam threats with businesses today include account hacking, money laundering, and phishing attacks, and so on. This can be reduced the implementation of effective KYC.
- Customer retention:
KYC makes the process of customer onboarding secure ever thus resulting in the creation of a valuable customer base.