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Banks, businesses, and payment services have become adamant about knowing their customers. Knowing your customer practices has become a legal requirement in these industries because they verify that their customers are who they say they are. This can be achieved through the implementation of KYC procedures. Reputed companies like Acuitytec.com will provide you with KYC services for protecting your company from harmful legal issues. Therefore, if you work with any of these institutions, you have to submit documentation that proves your identity. These are a few little-known facts about these regulations and practices.
Know your customer (KYC) is a process designed to verify the identity of individuals who work with money, from banking customers to investors and those purchasing large quantities from certain businesses. Its purpose is to curb money laundering. If you work with a business, bank or investment brokerage, you are responsible for providing proof of your identity to these institutions.
Then, these institutions track your business, banking or investment transactions as well as your business clients. This process allows these professionals to determine whether any of you or your associates are working with terrorist organisations, drug cartels or other unsavoury individuals and whether you are involved in illegal transactions.
About Know Your Customer Reviews
Your government has passed regulations that you must adhere to as someone who conducts financial transactions. In these regulations is the requirement that your account and transactions are reviewed regularly.
Your institution may follow a risk-based approach to their review process, which targets transactions and clients that are the most at risk of money laundering, or they may have to review every client they have, you included. In addition, clients the government determines are high or medium risk may have to be reviewed up to twice per year, while low-risk clients may only be subject to a review every three to five years.
At times, you or someone you know may receive an email rejection of their registration. This can be stressful because it means that their business with the institution must cease until the problem is solved.
Reasons for rejection include an old or blurry photo on your government-issued ID. You also need legal documents that prove you reside at the address in your file, but if you either cannot provide these documents or they cannot be verified, you may receive a rejection. Finally, your name must appear exactly as it does in your legal documents. In the case of marriage or divorce, your name may appear differently. In addition, the citizens of some countries order their names as first and last while other countries order their names last and then first. Also, look for middle names or initials in your documents and be sure to include them in your paperwork.
Know your customer remediation helps your financial institutions protect themselves. It prevents corruption, terrorist financing and money laundering. It assists clients with changing bank accounts, passport details and address changes. You may use it if your business has a legacy problem that places you at risk.
Mitigating Your Risks
Know your customer protects your financial institutions, but to protect yourself, you should pursue a known customer check on your business suppliers and clients when you begin and throughout your contract period. These audits will reveal any financial crimes or noncompliance so you can notify the government.
Although these regulations are required, you may not have to physically visit the bank or institution you are working with to complete the documentation. New online or electronic documents can be downloaded and submitted. However, you will have to submit your proof of identity documents as well. You may also be subject to biometric authentication.
Know your customer regulations are there to protect you. They can protect your business and your personal assets and keep you from working with individuals who pursue illegal financial practices. Learn more about this process to ensure that you are fully protected.
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