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- Know Your Customer (KYC) Supporting Documentation — How to Smooth Out & De-Hassle Your KYC Process with Clustdoc
Know Your Customer (KYC) Supporting Documentation — How to Smooth Out & De-Hassle Your KYC Process with Clustdoc
The KYC (Know Your Customer) process is becoming standard practice in many industries. Previously limited to banks and financial institutions, it now affects real-estate, the loan industry, and online gambling and gaming. This is not surprising as KYC is the backbone of the worldwide legislative effort to curb money laundering and funding of terrorist activities.
Whatever industry you’re in, one thing is certain — the more flaming hoops your customer has to jump through to get access to your service, the more likely they are to give up. So you do your best to eliminate hurdles and friction. It’s all about that smooth client onboarding process, right? But what happens when those hurdles are government-mandated, as is the case with KYC and KYC supporting documentation?
Well, then your goal needs to be to make the process as simple and straightforward as possible.
And, in this post, we’ll show you how you can do that.
Here’s what we’ll cover:
- what KYC really means (and what are AML, CFT, CDD, and eKYC);
- how to create a KYC checklist (& which KYC supporting documents do you need).
- how Clustdoc takes your eKYC document collection process to a whole new level.
Let’s dig into it.
What Is KYC (& Where Do AML, CFT & CDD Come In)
Before we dive into KYC processes and KYC supporting documentation, it’s important to understand why (and how) those came about.
Know Your Customer (KYC) and Customer Due Diligence (CDD) are a set of practices, laws and regulations adopted all over the world to combat money laundering and the funding of terrorist activities. They are similar in that they require extensive background checks and compulsory identification. (It’s important to say that CDD and KYC are not the same, but they are similar enough to be treated equally for the purposes of this post).
The KYC process requires you to do three things:
- verify individuals applying financial, banking, or property management services;
- monitor accounts and activities, and report suspicious transactions and deals;
- figure out the best services you can offer to every individual client.
Broadly speaking, the KYC process is designed to satisfy two international rules: Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT). To learn more about AML and CFT, check out our post on KYC for banks and financial institutions.
What is Anti-Money Laundering (AML)?
Anti-Money Laundering (AML) rules are a set of laws and regulations that were designed to prevent money-laundering activities.
What is Countering Financing of Terrorism (CFT)?
Countering Financing of Terrorism (CFL) rules are a subset of the AML rules. They aim to give financial institutions and other businesses the means to address suspicious activities that relate to terrorism funding.
During the Know Your Customer (KYC) process, you verify that the customer actually is who they say they are. In addition to abiding by the AML and CFT rules, the goal of the KYC process is to establish what the client’s needs are. That way, you can serve them while minimising risk for everyone involved.
What is Digital KYC?
Digital KYC (also known as eKYC) is the process of collecting KYC forms supporting documentation via an online platform or software. As more and more industries fall under KYC rules (KYC for online gaming is just around the corner), eKYC becomes important because of its speed and simplicity.
Are you a bank, an exchange or any other business bound by the KYC rules?
Start managing your eKYC processes with Clustdoc.
Clust is a secure, certified portal built to make eKYC easy
and lightning-fast for you and your clients.
KYC Forms & Supporting Documents
Considering the purpose of the KYC process, it’s no wonder that it results in a lot of work (and paperwork) for your clients.
Unfortunately, there’s no way around it.
The best that you can do is create a process where KYC forms and documents are collected as quickly and as efficiently as possible.
The data that you collect is going to differ depending on whether you’re conducting basic KYC (for individuals opening a bank account, for example) or detailed KYC (for business entities looking to invest or loan money).
A most basic KYC checklist will require you to collect:
- date of birth
- legal address
- tax/personal identification number
- employment status
- annual income
- net worth (accounts/property owned)
But that’s just the tip of the iceberg.
If you’re in financial services or real estate, you’ll also need to have:
- liquidity data
- tax status
- risk tolerance
- investment experience & timeline
And, if you’re working with business entities… Well, let’s just say the pile keeps on growing.
- trading name
- company identification number
- VAT/GST number (if applicable)
- status (active or something else
And we didn’t even get to separate KYC forms and checks for directors, proprietors, partners, true beneficiaries, and so on. Or supporting KYC documentation that needs to be submitted, such as certificates, phone/electricity bills, passports or driver licenses, tax forms, etc.
The list goes on and on.
So what happens when a new client inquires about your services, and you send them a mile-long email that signals hours spent on document-hunting, scanning, and emailing?
Usually, they reconsider, right?
Maybe they don’t need your particular service? Maybe they can find someone who will make the KYC onboarding process faster and easier for them? And they find that someone.
Well… what if we told you that someone could be you?
You could make your KYC process faster and easier. You could reduce new client churn (drastically) by speeding things up and making them frictionless. And you could be that business people turn to when they’re frustrated and annoyed with how long it takes your competition to get the ball rolling.
All you need is Clustdoc.
Create a Seamless eKYC Onboarding Experience with Clustdoc
When it comes to KYC documentation and forms, the three most important things for you as the service provider are:
- your clients don’t churn because you’re giving them a week’s worth of work;
- you can repeat the process with five, ten, or 1,000 clients (it’s the same to you);
- you’re doing what the law requires of you (faster, cheaper, and more accurate).
You’ll get all that once you transition your eKYC to Clustdoc.
And here’s how:
- Create your KYC form — use Clustdoc’s KYC template or import your own standard KYC form. Tailor form fields (depending on which data you’re collecting), and add upload fields for KYC supporting documents. These documents can be signed electronically using our e-signature functionality and uploaded as photos (no need for a scanner).
- Send invites or embed to your website/emails — share the form with your clients. You can send it in an email, or embed it on your website. The link will take the prospect to your Clustdoc client portal, where they can securely complete their KYC onboarding.
- Track the KYC onboarding process — you can check on the status of every KYC form you send out. And you can schedule regular reminders that Clustdoc will send out as the due date for submission draws near.
- Store data in a secure, GDPR-compliant client portal — every piece of document you collect is handled by a secure & customizable client portal with the highest level of encryption (in line with EU’s customer data protection policies).
- Manage all documents in one place & on-the-go — you don’t have to be in front of your computer to request changes, accept submitted documentation, or request changes. Clustdoc’s app lets you handle all this from your phone so that you can quickly respond and provide a seamless KYC onboarding experience.
- Easily & safely connect with other tools — our integrations allow you to connect your custom client portal with other tools that you’re using. Share KYC supporting documents and KYC forms with your colleagues, send them to your CRM, or share them with your data verification provider without wasting precious time.
Take Your KYC Onboarding to the Next Level with Clustdoc
Getting your customer due diligence on point is important.
What’s more important is doing it quickly and staying compliant.
Your customers have choices. If you take too long to process their requests — or if you make KYC onboarding complicated — they just might check out your competition.
Start using Clustdoc to prevent that from happening.
Take Clustdoc for a 14-day spin free of charge (no credit card required).
Create bespoke KYC forms, collect docs in a breeze & impress your prospects.
Clustdoc is a secure, certified portal built to make eKYC easy
and lightning-fast for you and your clients.