KYCC (Know your Customer’s Customer), is vital for any business.
Today, financial institutions aren’t the only businesses required to fulfill regulatory requirements. Customers due diligence (CDD) is also required for e-commerce businesses, cryptocurrency platforms as well online dating sites, gaming websites and other online businesses.
Why? To avoid severe penalties and fines for violating Anti-Money Laundering or know Your Customer (KYC). KYCC stands for Know Your Customer’s Customers. This term is used to refer to compliance obligations. Let’s look at each of these in greater detail to get a better understanding.
What exactly is KYC?
KYC, shorthand for Know Your Client, is a regulatory obligation businesses must adhere to. Companies must verify each customer who joins their platform to ensure compliance with KYC standards. This process starts with account registrations and continues to the end of the customer’s journey. Here are key steps of the KYC compliance procedure:
- Verify customer’s identity
- Ensure that the funds and activities of customers are legitimate
- Based on the client’s threat of money laundering, make a risk assessment
KYC in banking or other financial activities requires fully automated ID verification solutions. There are thousands of customers that use these services every day. The tedious task of ID verification is time-consuming and tiring if you use manual methods.
What exactly is KYCC?
KYCC is an acronym for Know Your customer’s customer. It is one step more than KYC. KYCC compliance is a requirement for businesses. They must monitor the activities of third parties and keep track on who they are dealing with.
Why is KYCC Required by Businesses?
To stay on top of the game, any business needs to adhere to international standards. Compliance procedures are vital to prevent fraudsters, criminals and organized criminal organizations from stealing your business. Businesses can take advantage of the following benefits regarding KYCC compliance
1. Deter Fraud
KYCC occurs during the customer onboarding phase. AI-powered ID verification technology ensures that no fake ID, fraudulent document, or spoof attack is allowed to the platform. As a result, frauds of all sorts, including identity thefts and account takeovers as well as money laundering, are eliminated.
2. Increase Security
AI-based AI-based tools are commonly used to carry out KYCC processes. These solutions are very accurate when it comes to weeding fraudsters out and cyberthreats. AI and automation enhance internal security measures by improving existing KYCC procedures.
3. Enhance customer relations
Customers and their everyday activities are carefully analyzed by businesses to establish trust and transparency. This is for customers because the company gives transparency top priority. This ensures that businesses operate in a risk-free atmosphere.
4. Be respectful of regulatory authorities
Global regulatory agencies such as AUSTRAC (Financial Action Task Force), FINTRAC, FATF, and AUSTRAC (Financial Action Task Force) are all available. Financial businesses must ensure compliance with AML/KYC/KYCC. Companies who fail to meet these standards risk heavy fines, lawsuits, and even losing their brand reputation.
5. To Provide Shield For Minors
Online casinos, gaming platforms, tobacco, and ecigarette sellers that are age-restricted have to keep minors off their platforms. This is vital as failing to do so may lead to increased fraud against minors. KYCC procedures ensure companies are vigilant when selling age-restricted product, keeping them out of the reach of children.
Understanding Anti-Money Laundering
One important thing to remember when understanding KYCC procedures: the term KYC is part of the umbrella term Anti Money Laundering. AML verification refers to KYC procedures, KYCC protocols, and screening of customers against global watches lists. Below are some examples:
- Abast media news
- Politically Exposed Person (PEP), lists
- Watchlists for criminals
- Sanctions globally
Importance KYCC Banking
KYCC aids banks in the following:
- Seamless onboarding clients businesses
- Financial fraud and corruption remain at the lower end of the scale by checking businesses.
- The client companies and their UBOs (Ultimate Benefit Owners), executives as well as vendors and intermediaries all receive daily business verification. This allows for greater transparency.
- In addition to the benefits of automated KYCC services, identity verification can also be performed remotely in less than a minute. This greatly enhances customer experience and makes the company available from anywhere.
- API integrated KYCC has the ability collect data from various sources. Once the data have been collected, the only thing companies need is the right credentials to access it.
