This Know Your Customer (KYC) Checklist features common procedures for customer identification, due diligence, ongoing monitoring, and adherence to legal standards.
It plays a crucial role in safeguarding against identity theft, financial fraud, money laundering, and terrorist financing.
By implementing this checklist, businesses can ensure a secure and reliable environment, fostering trust and compliance in their operations, it’s a good common practice to include in your business as whole, no matter how big or small you are.
Know Your Customer Checklist (Ellaborated Version)
The Elaborated Know Your Customer (KYC) Checklist represents a comprehensive and detailed approach to verifying the identity of clients and assessing potential risks in business relationships for financial institutions and regulated companies.
This enhanced version goes beyond basic compliance, delving into the intricacies of customer due diligence, enhanced due diligence for high-risk clients, and ongoing monitoring to detect and report suspicious activities. It has been designed to meet and exceed basic regulatory requirements, providing a robust framework for preventing various types of fraud.
Detailed Know Your Customer (KYC) Checklist
Detailed Know Your Customer (KYC) Checklist
Customer Identification Program (CIP)
– Use reliable, independent source documents, data, or information (e.g., national ID, passport).
– Employ biometric verification methods where applicable.
– Consider country of origin, occupation, transaction patterns, and purposes of the account.
Customer Due Diligence (CDD)
– Document the expected account activity, including transaction types, volume, and frequency.
– Identify and verify the origin of the funds and wealth, and ensure they are not derived from illicit activities.
– Implement additional measures such as obtaining senior management approval and conducting ongoing monitoring of the business relationship.
Ongoing Monitoring and Reporting
– Use automated systems to flag unusual transactions for review.
– Perform regular reviews of existing information, especially for high-risk customers.
– Understand the legal requirements for reporting in your jurisdiction and comply with them.
Compliance and Record-Keeping
– Stay informed about regulatory changes and adapt your processes accordingly.
– Securely store documents and ensure they are accessible for audits or inspections.
Risk Management
– Tailor the intensity of the KYC process based on the customer’s risk profile.
– Engage in continuous improvement and training to adapt to new threats.
– Conduct regular training sessions and assessments to maintain high levels of competency.
