If you work in the financial services industry, you’re probably well aware of the rules and policies around Know Your Customer, or KYC. KYC checks are all about identity verification, and before starting work on a wide range of legal or financial matters, banks, credit card companies and similar firms must work out who they are dealing with. KYC checks are the only way to establish the client’s identity, comply with government regulations around money laundering and mitigate fraud risks. Lawyers, bankers, accountants, and estate agents are have a legal duty to complete these checks before providing their services.

From a customer’s point of view it can sometimes seem like just another layer of red tape and forms to fill in, but unfortunately you have no option but to comply. Less detailed checks apply when you wish to open an account at a bank you already have other dealings with, and if you approach an institution which you have not used before, you might have to provide more information.

Manual Know Your Customer Checks

Traditionally, identity verification was paper-based. Clients would meet face-to-face with their solicitor or accountant, and this sometimes still happens in cases where clients prefer to deal with such matters in person, or don’t have smartphones or internet connection. However, arranging face to face meetings can be tricky with diary conflicts, missed appointments or documentation errors. Manual identity checks can also be difficult, as checking documents such as a passport involves matching the client’s face to the passport photo, validating birth dates, checking expiration dates, scrutinising the Machine Readable Zone data, inspecting holograms, and examining stitching for tampering. If you’re not an expert in spotting a forgery, it can be hard to know you are being presented with a fake or not.

Transition to Digital KYC Checks

The pandemic changed the way we all did business and a rapid move to online identity verification. Businesses and clients soon discovered that digital checks had many advantages including:

• Time efficiency – it’s quicker for everyone to allow customers to complete the checks online rather than in person.
• Fraud Prevention – digital methods are better at picking up fraud attempts than humans
• Audit trail – online verification generates its own records, rather than someone having to input the details by hand.
• Convenience – customers can complete their checks from home, using their phones and whenever is easiest for them,

Benefits for the Customers

From the customer’s perspective, they want the process of selling a property or opening a new bank account to be as simple and straightforward as possible. If things go smoothly, this reassures them that they are dealing with a reputable firm which knows what it is doing. If on the other hand they run into issues with crashing websites or forms which are difficult to get through, this could negatively affect their ideas about your company. If you do run into issues with getting through KYC checks, ask your bank or lawyer’s customer service team for help.