Know your Customer
- Carly
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 |
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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 |