Subscribe to stay notified
I Understand We use cookies to help us in different ways, such as with our marketing and to make our website better. See our Cookie Notice for more information.
If you continue to use our website, we’ll assume you’re OK with us using cookies.

Media

What are KYC Requirements?

Matthew Warner | October 2020

Your identity is made up of a large number of different factors which are used in different circumstances. A name, age and appearance may be the most obvious ways someone would identify you, but there are many other aspects to an identity and it changes based on who you interact with. A friend or family member may use a nickname rather than your full name, which a passport application or contract may require; a bartender might know your age where a distant relation might not; someone you’ve corresponded with by e-mailed may not even have any idea of what you look like. For KYC purposes, however, there are very specific parameters that make up your identity and need to be ascertained and monitored by companies to which KYC and AML regulations apply.

Taking the UK as an example, for the basic level of KYC, businesses are required to perform Customer Due Diligence (CDD), which requires the business obtain a customer’s name, a photograph on an official document which confirms their identity, a residential address, and a date of birth, which can then be verified. In some situations, such as when someone is acting on another’s behalf, this will need to be done for all those involved in the process rather than just the individual who will receive the services or goods in the end. There are also ‘Enhanced Due Diligence’ checks which are required to be carried out in certain circumstances, such as when a customer is not physically present, or when a person is identified as being ‘Politically Exposed’. These entail further information to be provided in order for regulations to be met, which can include national ID numbers, photographs or other measures. Certain services may require additional data. 

 

To comply with the regulations as they seek to prevent fraud, companies that are required to perform KYC checks will ask for these pieces of evidence, usually in the form of two different official documents (although some may ask for specific or additional documentation) which will allow them to gather the data which can then be verified and checked against the necessary government lists and databases to ensure the individual looking to use the services is legitimate and not involved in any criminal activity.   

 

Most often, the documentation a company will ask for will be a passport, driving license, national identification card and/or a recent utility bill. These documents hold the information that the companies can then use to conduct KYC checks and approve the customer’s onboarding. However, showing this documentation may expose other information that is not relevant to the KYC process which is a potential issue for privacy. 

 

Through Blockpass, users can maintain control of their identity and choose which merchants to share it with depending on whether they want to engage with their services or not. On the other side of the interaction, merchants can specify only the specific fields their business requires for KYC purposes, avoiding any issues with sharing data that is surplus to requirements. Data is verified and certified as such through the Blockpass Mobile App so merchants can trust the data to be accurate. With this option and the move towards remote verification that has been accelerated by the current coronavirus pandemic, a selfie of the user with their identity documentation is also used to verify they are who they say they are. In doing this, Blockpass provides quick and easy KYC for onboarding customers, making things more efficient and user friendly for both sides of the interaction whilst maintaining privacy, user control and flexibility.

 

The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Sign up for FREE at console.blockpass.org.

 

For more information on KYC requirements check the regulations in your country. 

 

Useful Links and More Information:

https://www.gov.uk/government/publications/identity-proofing-and-verification-of-an-individual/identity-proofing-and-verification-of-an-individual

 

https://www.gov.uk/guidance/money-laundering-regulations-your-responsibilities

 

https://www.fincen.gov/resources/statutes-regulations/usa-patriot-act

 

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32018L0843

 

https://www.austrac.gov.au/

 

https://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/1-eng

 

https://www.regulationasia.com/hong-kong-china-framework-comparison-kyc-standards/