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  • Category: Web Application
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Data Gear eKYC

Know Your Customer (KYC) system assesses the risk a customer poses to the bank or financial institution. KYC is a continuous process of assessment and not a onetime assessment of a customer. Customers are assessed in different stages of their relationship with the bank or financial institution.

KYC is a fundamental practice to protect organizations from fraud and losses resulting from illegal funds and transactions. KYC refers to the steps taken by a financial institutions or businesses to:

  • Establish customer identity
  • Understand the nature of the customer’s activities (primary goal is to satisfy that the source of the customer’s funds is legitimate)
  • Assess money laundering risks associated with that customer for purposes of monitoring the customer’s activities
KYC is a very important process if we know that, in 2018, ING, the largest bank in the Netherlands, was fined $900 million after insufficient controls were discovered in its Customer Due Diligence (CDD) process. Historically, the compliance department has been one of the last functions within financial services firms to embrace digital transformation. A general reluctance to steer away from established processes caused the compliance function to remain an extremely manual and paper-based process for longer than other comparable functions within the business. Even when it involved a digital element, this was usually through a traditional system within an on premise IT infrastructure that could only be accessed from the machines at the office.