Financial institutions today are not the only businesses that must meet regulatory requirements. E-commerce stores, cryptocurrency platforms, online dating sites, gaming sites, and other online businesses are also required to perform due diligence (CDD) procedures.
Why? Avoid heavy fines and fines for non-compliance with anti-money laundering and Know Your Customer (KYC) regulations. A new term has emerged in the context of compliance obligations: KYCC or Customer Know Your Customer. Let’s take a closer look at all three of these for a better understanding.
An acronym for Know Your Customer, KYC is a regulatory obligation that businesses must comply with. To comply with KYC standards, businesses are required to verify the identity of all customers registered on the platform. This process starts at the initial stage of account opening or registration and continues until the end of the customer journey. Here are some of the key steps that the KYC compliance process comprises:
- Verify the customer’s identity
- Ensuring that the client’s activities and funds are legitimate
- We make a risk assessment based on our clients money laundering threats.
KYC in banking and other financial activities requires the use of fully automated identity verification solutions as thousands of customers flock to the platform every day. The manual method makes identity verification tedious and time consuming.
KYCC, which stands for Know Your Customer’s Customer, is one step ahead of KYC. KYCC compliance requires businesses to keep an eye on who their customers are dealing with, what their activities are, and the money laundering risks associated with third parties. Panama Papers’ regulator, for example, maintains tabs on real ownership to monitor the complex routes used by money launderers.
Any business that needs to get ahead must adhere to global standards. Not only that, but compliance procedures are critical to keeping scammers, criminals, and organized criminal gangs away from your business. When it comes to KYCC compliance, businesses can benefit from:
KYCC is carried out in the early stages of customer onboarding. An AI-powered identity verification solution prevents fraudulent documents, spoofing attacks, or fake identities from accessing the platform. As a result, all types of fraud are eliminated, including identity theft, account takeover, and money laundering.
The KYCC process is usually executed with the help of AI-based solutions. These solutions provide high accuracy in eliminating scammers and cyber threats. Through the ongoing KYCC process, internal security mechanisms are strengthened through AI and automation.
When companies closely analyze their customers and their daily activities, relationships are built on transparency and trust. For customers, this means that the company puts transparency first. For businesses, this enables a risk-free environment.
Global regulators such as the Financial Action Task Force (FATF), AUSTRAC, and FINTRAC have mandated compliance with AML, KYC and KYCC for financial businesses. Companies that do not comply with these standards may face heavy fines, fines and lawsuits as well as damage to their brand reputation.
Age-restricted platforms such as online casinos, gaming sites, and sellers of cigarettes and e-cigarettes are responsible for blocking minors from their platforms. Failure to do so can lead to a surge in fraud targeting minors, so this is essential. KYCC procedures ensure that companies remain vigilant and children away when selling age-restricted products.
An important point to not miss when understanding the KYCC process is that the term KYC falls within the umbrella term for anti-money laundering. AML verification includes customer screening against KYC procedures, KYCC procedures and global watchlists. An example of such a list is:
- Harmful Media News
- List of Politically Exposed Persons (PEPs)
- crime watch list
- global sanctions
KYCC supports banking institutions in the following ways:
- Seamless onboarding of customer business
- Business verification keeps financial fraud and corruption lower.
- Daily monitoring of all client companies, Ultimate Beneficial Owners (UBOs), executives, suppliers and intermediaries with continuous business validation for greater transparency.
- An added bonus of the automated KYCC solution is that identity verification can be done remotely in seconds. This improves the customer experience and increases customer satisfaction as you can access your company from anywhere.
- API Integration KYCC software can collect data from numerous resources. Once the data is collected, the company only needs to enter the correct credentials to access the information.