What are KYC Regulations and why were they introduced?

The occurrences of fraud and crime are increasing day-by-day at an alarming rate.

The technological advancement of the various industries across the globe has led to a surge in the instances of financial crimes.

Every day we hear news regarding one or more crimes happening around us, especially on the digital platform. This is because the internet is accessible everywhere, connecting people from different corners of the world.

Fraudsters and cybercriminals try to use every source available to conduct various crimes that are untraceable. Various cybercrime investigation authorities have introduced strict measures to catch these cybercriminals, who are regularly updating their techniques and practices of conducting criminal activities.

Criminals started conducting fraud far before the internet was even conceived. Criminals have been active ever since humanity came into existence.
Every now and then we hear about past stories of how cowboy criminals looted cash in Texas and other regions. To fight such attacks, the US introduced the Banking Secrecy Act in 1970 to reduce the instances of financial frauds.

Then in 2001, after the 9/11 crashes, the United States introduced the US Patriot Act to reduce the instances of money laundering and financing of terrorism. By 2004, the Reserve Bank of India made it mandatory for banks across the globe to introduce KYC regulations.

KYC Regulations - A Measure of Fighting Fraudsters

KYC or Know Your Customer is a method where a business identifies its customers carefully to identify the potential risks of their negative intentions towards business relationships. It's an ethical requirement for many of the companies within the financial and securities sector nowadays.

KYC has been performed manually for many years as stated earlier, however, the process takes a long time to complete. This is because obtaining personal information from the client and verifying it takes time. But recently, thanks to technological advancement the KYC technique has been automated using artificial intelligence.

Many security and financial institutions are now preferring digital KYC services to scale back the probabilities of error and increase the efficiency of the customer due diligence process.

Money laundering refers to the illegal transfer of black money through financial infrastructure to hide its origins. The technique of money laundering is long and sophisticated but it safely provides illegal money to the launderer without leaving a sign of the money trail.

It's considered unethical because it converts illegal money into legal money within the eyes of the govt and other institutions. AML controls by shuftipro or Anti-Money Laundering is a term used by financial institutions to describe the legal controls according to which regulatory entities are supposed to detect and prevent money laundering.

AML and KYC regulations are a compulsory requirement set by regulators such as the FATF, United Nations, HM Treasury, OFAC, DFAT, etc to protect businesses from the harmful impact of money-launderers. The cash is utilised to fund criminal activities such as terrorist financing. Many laundering mainly consists of three main steps:

  • Placement;
  • Layering; and
  • Integration.

Suspicious financial transactions of all kinds are monitored by AML procedures. For suspicious people or PEPs, on-going AML is recommended to keep a close watch on them in real-time. Data sets and sanction lists are regularly maintained and checked for the same purpose.

Digital KYC Authentication

Automated identity verification screening services are provided by a number of KYC service providers nowadays. The prices and features of the services depend on the user’s requirements and some packages can even be tailored exactly according to their needs.

The process of digital verification includes the following steps. The customer is asked to verify their identity using their device (mobile or computer) camera. The software embedded in the online platform verifies the identity by studying the biometric features followed by the documents of the user to make sure if the customers are actually who they claim to be or not.

The services are secure and quick without delays and chances of error. The artificial intelligence systems detect and verify the identity thoroughly, avoiding even minor errors that are unavoidable in traditional verification techniques.

It is evident from the way banks and financial institutions are adopting digital identity verification systems that they are highly effective in impeding attacks from fraudsters and criminals. More and more businesses are also incorporating these systems as a means of complying with international financial regulations.

These systems have taken sums worth millions of dollars to be designed and there is a reason why they are so effective. Therefore in this technological era, going for digital KYC and AML solutions is not only important but necessary.

Cryptowire {powered by $STORE} @cryptow1re

Reddit_BTC 🤖: “Also, I would repeal the Bank Secrecy Act, Know-Your-Customer (KYC), and other laws that violate our...

2020-06-11 21:53:46
State Bank of India @TheOfficialSBI

@Ritendr03478626 Please note that list of valid documents for KYC are advised as per RBI guidelines.

2020-06-11 21:53:27
State Bank of India @TheOfficialSBI

@amits2628 KYC update may be effected through branch only.

2020-06-11 21:52:24
Aaron Huber @kycisrael

Enforcing AML/KYC Compliance When Legal Precedent Does Not Apply…

2020-06-11 21:51:32
Raus @raus_boss

@SchwartzyXRP @xxmikecheckxx @UpholdCard I totally feel you and uphold is creditable. I'm talking about this micro coins that can only be bought and sold in sketchy exchanges where you might not have kyc

2020-06-11 21:51:26
Priyanka @itspriyanka112

@IDBI_Bank At one hand u support digitization n on d other hand u ask customers to visit d branch to submit KYC docs or else you’ll would freeze the account... itz lockdown n pandemic crisis so plz upgrade ur process 2accept online KYC. Atleast 4decades old customers who r still loyal 2you.

2020-06-11 21:51:14

@Sunielphotograp @ro_ThaneNorth @socialepfo Sir, Please send request on email of your jurisdictional Regional Office for rejection of earlier claim submitted. You can get the contact details of regional office from:… . Additionally you may file a Covid claim from updated and approved KYC details.

2020-06-11 21:50:31

@jsb_kyc だと思うよ! あっ、確かにそうだね🤣笑

2020-06-11 21:49:58

Sarap sa feeling na nag oopen ka ng problema mo sa taong interasadomg makinig sayo✊🏻💙

2020-06-11 21:49:49
Vipin Sharma @vipsRB

@socialepfo Concerned office is sector 23 Dwarka New delhi. I have mailed them several times they reply that my ex company will approve the KYC. My company is saying that PF office is not approving digital signature of the company . Now please tell me what's is my fault

2020-06-11 21:48:39
State Bank of India @TheOfficialSBI

@iam_ani715 Cash deposit using Debit card is free at CDMs. Visit… for details.

2020-06-11 21:48:37
J. @itsjenct

@SFTVITY Kyc hyung, Sohee noona, Ryujin.

2020-06-11 21:47:14
Priyanka @itspriyanka112

@IDBI_Bank @mumbaimatterz please accept online KYC DOCUMENT during lockdown crisis. If an old customer cannot step out n go to your branch to submit the docs then plz don’t FORCE....n STOP sending last date reminders to do so n warnings to freeze account.

2020-06-11 21:44:51
Data Science @_Data_Science

Enforcing AML/KYC Compliance When Legal Precedent Does Not Apply

2020-06-11 21:42:38
#iBhacaEnt @into_ka_kava

@chris_DrPhil @KYC_co Zimbabwe is that good musician the label is denying a chance to release. Always shelving his albums and setting high feature fees

2020-06-11 21:42:38
RAVIKANT PASWAN @RavikantPaswa15

@TheOfficialSBI SBI गारू, लातेहार में दो सप्ताह से लिंक फेल होने के कारण ग्रामीण हैं परेशान, एक दिव्यांग 1 वर्ष से KYC कराने के लिए बैंक का काट रही है चक्कर। बैंक कर्मी की कमी,अकाउंट ओपनिंग,KYC, होल्ड हटाने का काम समय पर नहीं होने से ग्रामीणों का फूटा गुस्सा @HemantSorenJMM

2020-06-11 21:42:25
피곤한 인간🔅 @TH912_00

@kimfree_kyc 몰겠어용ㅜㅜ 그건 안 나와있어서...

2020-06-11 21:41:56