Know Your Customer, otherwise abbreviated to KYC, is a series of protocols which is a must across the world of business. Regardless of the specific niche that you work in, you need to make sure that your business and your employees understand the world of KYC and how it is applicable to you. Let’s take a look at some of the reasons why.
Protection for Your Business
KYC is vital as it protects your business from malicious parties who wish to use your business as an unwilling steppingstone within their greater plans. If you do not check where your customers and their money is coming from, there is a high chance that you could onboard customers who are involved in some shady activities.
It is not uncommon for criminals to use any number of sites for the purposes of money laundering or fraud. The funds they receive from these activities are then fed back into the criminal world for further fraudulent means and funding other illegal activities such as bribery, corruption, or even terrorism.
As you can imagine, no one wants their business to get caught up in this. KYC checks help to ensure that you truly know who the customer on the other end is, so that you are able to avoid such activity.
Relevant Across All Niches
It does not matter what type of business you run or how you receive your money – you need to make sure that you are engaging with KYC checks. If you don’t know who you are doing business with, how can you possibly expect to be able to do so safely?
Even in an area that carries a certain amount of anonymity with it, such as cryptocurrency, will still have KYC checks. A KYC crypto procedure might be slightly different compared to others, but they are still necessary to try to establish who your customer is.
The issue with cryptocurrencies is that in a pure transaction they can be handled anonymously. All someone needs is a certain key from the wallet of the other person in the trade, and it will be able to go ahead. However, when cryptocurrencies are being used in the place of a fiat currency to purchase goods or services, one can clearly see the need for KYC protocols. The customer needs to make an account to be able to use the company’s services, and therefore will need to drop the anonymity and allow the necessary checks to take place. If cryptocurrencies are to be accepted as part of mainstream society, and as a mainstream payment method, this is a step that must be taken.
Easy to Set Up
Nowadays, it is relatively easy to set up and perform KYC checks. There are many tools and automated processes that businesses are able to build into their onboarding processes to help prove the identity of their customers. These checks are super-simple to manage, so it is vital that all companies put protocols in place to make sure that they can be undertaken properly.
Since there are so many tools that can be used to help with KYC nowadays, there really is no excuse as to why companies cannot perform these checks and make sure they are to standard. Depending on the industry you are in, they might even be mandatory, so you could end up in big trouble with a regulator if satisfactory ones are not undertaken. Compliancy is a big issue in business that you simply can’t ignore. If you want to ensure that you are able to lead your company forward and meet the goals that you have set for yourself as a company, you need to make sure that you can do so in a manner that is completely legal. KYC checks might just be one area of compliance, but they could be one of the most vital depending on your area of business.
Protect Your Business Today
Regardless of what niche you might occupy within the world of business, you need to make sure that you are protecting it from every angle, and a big part of that is KYC checks. You need to make sure that you know precisely who your customers are so you can do business with them safely and securely – while protecting against fraud and other criminal activities.
As a business owner, it is your legal responsibility to ensure that you are correctly carrying out transactions at all times. Ignorance is no defence here, so you need to make sure that you are compliant at all times.
It is not enough to simply set up protocols and never return to them. KYC is an issue that you will need to review time and time again to ensure that you are always compliant with the latest legislation and rules. Make sure that you stay in the loop. If a change arises, make sure that you are able to make changes to your protocols correctly. With a robust KYC program in place, you should be able to protect your business from fraudsters and others who would try to do it harm.