Although many safeguards are in place to help businesses protect themselves, there are also advanced methods of fraud in place, which means companies must be proactive when protecting themselves against money laundering and other nefarious financial transactions.
What Is a Know Your Customer Check?
A Know Your Customer Check is essentially an identity check and ensures that customers are who they say they are. Although not required for every business, those in the financial industry or searching for investment should take measures to ensure all clients and customers are genuine.
What Is Needed for a Know Your Customer Check in the UK?
To ensure KYC Checks are carried out efficiently, businesses must obtain the correct details and documentation from the person. The documentation needed for a KYC Check is as follows:
- Valid UK Driving Licence
- Valid UK Passport
In addition to photographic identification, those wishing to invest in a business or have financial dealings with a company must also provide the following as proof of address:
- Bank Statement
- Utility Bill
- Driving License (if not used for photographic identification).
In addition to obtaining documentation, a business must ensure it is authentic. Fortunately, there are outside agencies that can carry out this service promptly.
How Do KYC Checks Help a Business?
One of the most important aspects of a KYC Check is to reduce the risk of money laundering. Financial institutions must carry out Anti-Money Laundering Checks to ensure that those with financial dealings are genuine. Using KYC Checks also helps businesses avoid being involved with other crimes, including drug dealing and property fraud.
Companies can carry a KYC Check out for this purpose alone, but it can involve other checks, including DBS and Credit Checks.
Using an external agency that offers all these services ensures that you are protecting customers and meeting the expectations of the police and HMRC regarding AML Checks.
However, other forms of fraud not connected to money laundering can occur. This is why a business may need to carry out several checks instead of one when vetting new customers. This is another reason why people outsource background checks to an external organisation.
How Long Does a KYC Check Take?
The time it takes to complete a KYC Check can depend on several factors but averages between two and five days. In addition to a KYC Check, other checks could delay the application process.
However, using an external agency ensure that a company can carry all checks efficiently and affordably. Furthermore, it gives financial institutions the confidence that every measure regarding identity checks has been taken, therefore protecting the integrity of the business.
Whether your business deal with stocks, shares, properties or credit facilities, carrying out KYC Checks ensures that all the relevant checks are made regarding a person’s identity, as well las ensuring investments are being made with the right intentions.