Know your Customer

The Customer in this context is the consumer

There is a separate Use case KYB (Know your Business) for the Business.

Summary

KYC means Know Your Customer and is a standard due diligence process used by financial institutions and other financial services companies to assess and monitor customer risk and verify a customer's identity during the onboarding process. Onboarding processes help prevent and identify money laundering, terrorism financing, and other illegal corruption schemes. KYC process includes ID card verification, face verification, document verification such as utility bills as proof of address, and biometric verification. Banks must comply with KYC regulations and anti-money laundering regulations to limit fraud. KYC compliance responsibility rests with the banks.

The Know Your Client or Know Your Customer ensures investment advisors know detailed information about their clients' risk tolerance, investment knowledge, and financial position. KYC protects both clients and investment advisors. Clients are protected by having their investment advisor know what investments best suit their personal situations. Investment advisors are protected by knowing what they can and cannot include in their client's portfolio. KYC compliance typically involves requirements and policies such as risk management, customer acceptance policies, and transaction monitoring.

See below for some Regulations for KYC.

Use case 1

Consumer requests a service from a Financial Institution

Triggering event

Consumer’s request for Financial Service, e.g. opening a Bank Account

Actors

Consumer, Financial Services employee

Preconditions

Consumer has some information on what is required to open a bank account

Post conditions

Consumer’s request is accepted

Scenario

The request could be in person at the bank

Alternate scenario

The request could be online using the web or mobile 

Related use case

The Financial Institution reaches out to the consumer with marketing material to open a bank account with some attractive offers like no fee, low rates etc.

Notes


Use case 2

The Financial Institution requests KYC documents from the user. (During implementation this could be an Epic (collection of related user stories) with a User Story for each type of document/s verified)

Triggering event

Financial Institution requests KYC documents from consumer

Actors

Personnel at Financial Institution, Consumer

Preconditions

Financial Institution receives request from Consumer

Post conditions

  • Document either verified or verification declined if standards were not met
  • Verification process include risk assessment against global sanctions lists
  • Ongoing monitoring and record keeping

Scenario

Verification of documents could be in person at the Financial Institution

Alternate scenario

Verification could be online which will require additional liveness check

Related use case

Consumer requests Financial Service from a Financial Institution

Google drive document for ToIP members