KYCkrav

KYCkrav is a term used to describe Know Your Customer obligations that regulated entities must meet to verify the identity of their customers and assess potential money laundering or terrorist financing risk. The concept is applied by financial institutions, payment services, and other entities subject to AML/CFT rules, as well as by some non-financial sectors with higher risk profiles.

The scope of KYCkrav varies by jurisdiction but typically covers customer due diligence, enhanced due diligence for higher-risk clients, ongoing monitoring of transactions, and record keeping. Onboarding usually includes identity verification, risk assessment, and the collection of information to establish the purpose and expected nature of the relationship, followed by monitoring and periodic reviews.

Typical data collected under KYCkrav includes personal identifiers such as name, date of birth, address, and government-issued ID numbers, as well as proof of address, source of funds, and the intended purpose of the account. Regulations often require screening against sanctions lists and political exposure, as well as ongoing scrutiny of transactions to detect suspicious activity.

Regulatory frameworks influencing KYCkrav include international guidance from bodies like the FATF and national laws such as the EU's AML directives, the US Bank Secrecy Act, and the UK Money Laundering Regulations. Compliance is often supported by technology, including digital identity verification, risk scoring, watchlist screening, and continuous transaction monitoring.

Privacy and data protection considerations are central, with obligations to minimize data collection, ensure secure storage, and govern cross-border data transfers. The requirements can entail higher costs and may impact user experience, but aim to reduce financial crime and support regulatory compliance.