Know Your Customer (KYC) Principles In Europe

When you are in the financial sector and dealing with validating the identity of your clients, there is something known as KYC or know your customer. Throughout Europe, it is a requirement to obtain identity verification as a way to help with the overall authentication process.

SignWise Services is one of the leading service providers to help those within the financial sector to fill the KYC requirements. This will make it possible for you to get the support regarding the type of electronic identity you need to establish, regardless of where in the EU the transaction is happening.

With regulations constantly changing regarding the electronic signatures and even KYC requirements, you need to have a company you can rely on to provide you with support. Especially within the financial sector, trust is of the utmost importance when conducting any banking or legal activities, including across borders of the EU.

What are the KYC Requirements?

UKnow Your customernderstanding more about KYC will help with non-repudiation of an identity and allow you to embrace security more efficiently.

The primary focus of KYC is to ensure that you identify and thereby know the identity of your client before obtaining their approval on a document, open up an account for them, or perform various other activities. Otherwise, the transaction becomes invalid because you cannot verify whether it was the client who provided the authorization.

Some of the controls that are in place include:

  • Determining Risk Of Customer To Commit Fraudulent Acts
  • Name Matching Against Lists
  • Creating Expected Transactional Behaviors
  • Monitoring Customer transactions
  • collecting and analyzing basic identity information, also known as CIP or customer identification program

Throughout Europe, there are some different laws in place by country. For example, Italy exercises regulation under Central Bank (Banca d’Italia) while Luxembourg amended Anti-Money Laundering (AML) laws and regulations in 2015 to be able to govern KYC.

KYC is a requirement, and it is something that becomes difficult with cross-border transactions in the EU. Having a network that understands KYC and will provide identity authentication will increase the effectiveness of transactions completed through SaaS as well as a variety of other electronic business transactions across the European Union. You will be able to know your customer and decrease the red tape in place for businesses. This will make it possible to reduce overhead costs and increase profits. It will also reduce paperwork dramatically because of the online administration that will take place.

Depending upon the type of transaction, you may also need signature credentials. These will take a tiered approach, going from low assurance to substantial assurance all the way up to high assurance, which will involve proving a person’s identity and potentially include the organization where an individual is represented.

Ultimately, it is imperative that you take the time to know your customer because it will impact everything that you do online. While it may be a time-consuming task, in theory, is based on the company that you choose to work with. You have the ability to simplify the task and take advantage of electronic signatures to clear up a significant amount of paper trail.

The various KYC requirements can be met with the use of SignWise Services because of its full compatibility with current regulations. It will make it possible for you to authenticate users faster, and should you need electronic signatures on documents; those can be obtained through the same company. Finally, it will all easily integrate into the various applications that you use. Regardless of the country, you’re working in within the EU; transactions can be completed with ease because of knowing your customer through identity authentication standards.

POST IS WRITTEN BY

Ott Sarvfounder@SignWise Services and electronic identity expert.

manager @SignWise Services and electronic identity expert

I have primarily worked as an R&D visionary and adviser for PKI-based authentication, eSigning, eSignature validation and eAuthorization services. I was part of the team that worked on the Estonian electronic identity for the Ministry of Economic Affairs and Communications, creating service portals for local authorities and annual electronic reports submission system for the e-Business Registry – winning the Best e-Government Solution award at the World Summit Award in 2011.

Learn more about electronic identity and document signing trends and how you can get the support for your business by contacting SignWise Services team now.

Contact with SignWise Services team

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