Connect with us

Cryptocurrency

How KYC Solutions Will Benefit the World of Finance

KYC is the procedure to determine the authenticity of customers to protect the business from fraudulent activities & terrorist financing.

mm

Published

on

How KYC Solutions Will Benefit the World of Finance

Know your customer (KYC) is the procedure to determine the authenticity of customers to protect the business from fraudulent activities and terrorist financing

It is almost impossible to miss the terms KYC and AML in the world of banking or finance. KYC laws were introduced in 2001 after 9/11 as part of tightening financial laws to detect any kind of terrorist behavior. Today, every legal and financial operation require KYC Compliance in some form.

What’s the need for KYC Authentication

One may assume all the paperwork involving KYC is tedious and tiresome, but it is highly important as well. The main purpose of KYC is to prevent any kind of identity theft, financial fraud, money laundering, and terrorist financing. Through the use of efficient KYC solutions, the company can better know their customers and avoid any potential risks accordingly.

KYC and AML

AML stands for Anti-money Laundering and it includes law, policies, and regulations to combat money laundering and generating income fraudulently. At the core, KYC/AML is connected although they are different. As established above, KYC includes the verification of the customer and their financial dealings. Similarly, AML consists of KYC solutions, risk assessment and risk-based AML policies, internal audits, AML compliance.

Virtual Identity

KYC and Cryptocurrency

The main idea of cryptocurrency is anonymity and KYC is the exact opposite of it. So why is KYC so important in the crypto world? The reason is simple. Due to the anonymity presented by the digital currency, it is highly lucrative for terrorists and fraudulent people. To ensure that the digital currency is not being used illegally, it is highly important to provide KYC solutions to digital exchanges. The process of KYC for banks and digital exchanges is the same as it requires Proof of Identity (POI), Proof of Address (POA) and other relevant documents.

KYC Solutions – A List of Known Measures

To run an effective KYC procedure, some important elements are necessary. Let us examine them.

Customer Identification Program (CIP)

To know about the validity of your client and to ensure they are who they say they are, it is important to properly identify your customer. Identity theft is far too common and widespread and according to statistics, over 16.7 million US consumers were affected by identity fraud resulting in the theft of $16.8 billion in 2017.

The main requirements to open a financial account are:

  • Name
  • Date of Birth
  • Address
  • Identification Number

While gathering this information is enough, the company must ask the client for relevant documents and check the authenticity of these documents at a suitable time.

Customer Due Diligence (CDD)

You have to trust your client and for that purpose, you have to perform CDD on them. Customer Due Diligence is the process that involves verifying the authenticity of your client protecting your organization from any potential terrorists or fraudulent people. There are three levels of CDD:

  • Simplified Due Diligence (SDD) which involves low money accounts and the risk for money laundering or terrorist financing is low.
  • Basic Customer Due Diligence (CDD) is information taken from all the customers to perform checks.
  • Enhanced Due Diligence (EDD) involves collecting more advanced information from high-risk customers.

Ongoing Monitoring

It is not enough to check your client only once and for that purpose, you would need a software that can monitor your clients regularly. Any spike in the client’s activity or unusual cross-border account activity etc. has to be monitored closely.

Helpful Resources:

1. Why is Cybersecurity Important For Enterprises?

2. 5 Website Security Tips Every Employee Should Know

3. Get VPS Hosting For Your Websites For Better Results

4. Top Ten Blockchain Applications That Are Transforming Industries

5. 6 of the Best Wireless Security Cameras You Can Get in [2019]

6. How to Protect WebSites Against Attackers or Hackers by using “X-Security Headers”

We are an Instructor's, Modern Full Stack Web Application Developers, Freelancers, Tech Bloggers, and Technical SEO Experts. We deliver a rich set of software applications for your business needs.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Bitcoin

Check Out the Remarkable Advantages Which an Individual Can Attain by Using Bitcoin!

The introduction of bitcoin in this world has been proven to be the best thing. This is all because the features that this outstanding digital currency possess are just out of the world.

mm

Published

on

Bitcoin a good trading platform

The introduction of bitcoin in this world has been proven to be the best thing. This is all because the features that this outstanding digital currency possess are just out of the world. No one would have ever imagined that it would become possible for people to make instant transactions in a completely anonymous way.

There are various advantages of bitcoin, and if you are not familiar with them, you are missing a great piece of knowledge. By learning about the benefits of bitcoin, you will indeed become aware of this most popular digital currency value.

1. Private transactions!

You will be amazed to know that the bitcoin transaction is entirely anonymous. As you know, the payments made through the banks can be tracked easily, but bitcoin transactions are completely unidentified, and they cannot be tracked at any cost. The person is only allowed to know about the address of the bitcoin wallets from which the bitcoins have been transferred.

But the person’s identity cannot be identified, which is a truly great advantage of bitcoins. If you are a person who doesn’t want to show their wealth and the transactions which you are making, then you should surely shift to the use of bitcoins. The people who want to trade bitcoin anonymously can use eth code.

2. Freedom of making payment!

You need to know that bitcoin is the kind of cryptocurrency that provides a higher level of freedom to its users. You can make bitcoin transactions at any time and from any place whenever you want. You can send the bitcoin to any person from any part of the world. There are no intermediaries in between the bitcoin transaction, which helps you in giving complete freedom.

Bitcoin Cryptocurrency

There is no restriction to you once you start using bitcoins. There is no boundaries or borders of bitcoin transaction, so it is straightforward for you to make the international transactions. Moreover, there is no limit to making bitcoin transactions. This means that you can spend as much amount of bitcoin on a person without any foundation. The freedom Bitcoin offers crucial for attracting people to start investing in this digital currency.

3. Minimal fees!

Are you fed up with paying a higher amount of transaction fees while making a transaction from the bank? If yes, then you need to invest in bitcoin. This is because paying with bitcoin requires you to pay low fees or no fees at all. The whole transaction fees depend on the precedence of the person.

You need to know that if you want your transaction to get processed very fast, you will have to pay the transaction fee, which is very low if we compare it to the other kinds of transactions made from the fiat currency. It has solved the issue of so many people.

Earlier, people had to pay a considerable amount of transaction fees when they needed to make an international transaction or enormous amount transactions. But now, bitcoins allow you to make any transaction by paying very minimal transaction fees, and this is a kind of blessing for the people who have to make a transaction daily.

4. Fast transactions!

If we compare bitcoin transactions to the bank and financial institution, the transactions made from bitcoin are speedy. You wish to be glad to understand that the transaction made from the bitcoin is as fast as sending a mail, and it can be processed in less than 5 minutes.

If the transaction is a zero-confirmation transaction, then it can be processed even faster. The trade made from credit and debit cards is also processed fast, but you will have to pay a considerable fee, which is not required to yield while making a bitcoin transaction. The transaction cost of bitcoin is meager if we see the speed of the transactions.

5. The ending thoughts!

I expect that by now, you might have learned so many advantages of bitcoin. These advantages are enough for making the mind of the person invest in this top-rated digital currency.

Continue Reading
Advertisement
Computer10 mins ago

5 Features Of A Proactive IT Strategy

Computer Network38 mins ago

Top Crucial Steps For CEO in Case of Ransomware Attack

Marketing12 hours ago

What is The Gray Market, and How to Protect Against it?

Games1 day ago

Basic Rules and Guide on How to Play a Sudoku Free Puzzle Game

Internet2 days ago

Comprehensive Guide to Gigabit Speeds

Bitcoin1 week ago

Check Out the Remarkable Advantages Which an Individual Can Attain by Using Bitcoin!

Internet1 week ago

4 Best Phone Providers You Can Choose to Connect with Your Loved Ones

Cryptocurrency1 week ago

PrimeXBT Retrospective And What’s Next For The Ultra Hot Trading Platform

Gadgets1 week ago

Tips For Better Sports Photography

Digital Marketing2 weeks ago

3 Reasons Why TikTok is Pivotal for Influencer Marketing

Advertisement

Trending