Use this KYC checklist (Know Your Customer) to keep your company safe

If you work for or represent any financial institution, one of the first things you should ask yourself is whether or not you really know your customers. Yes, you may have chatted on the phone before or grabbed a quick coffee together in the past but how can you ensure that they’re being truthful about their identity?

Frauds and other illegal financial practices occur on a regular basis, with EU reports estimating that money laundering activities make up between 2% and 5% of the global GDP. As you know, these offenses come with hefty punishments for both the perpetrator and the organization with which they carried out the crime. 

Being unaware of the offender's activities unfortunately does not make you immune to penalties, fines and, of course, reputational damage. The good thing is that a Know Your Customer (KYC) checklist is the solution to all of your problems, and we’ll show you how to make one yourself. 

Alternatively, you can grab our free template right now and skip the whole reading part. 

What information should I request in a KYC checklist?

Your KYC checklist should provide you with everything you need to be able to confirm a customer’s identity, learn more about the legitimacy of their financial activities, figure out the source of their money and their potential risk to your organization. 

Here are 25 of the most vital pieces of information and documentation to think about when creating your KYC checklist. 

Introduction

Most clients don’t know anything about KYC forms, so it’s best to start with a simple introduction. For instance, you can write something like this:

“This KYC checklist is designed to help us better understand your financial needs, so we can provide you with the best possible service. By filling out this form, you help us comply with regulatory requirements, safeguard your financial transactions, and protect against fraud and identity theft. Your cooperation enables us to maintain a secure and trustworthy financial environment for all our clients.”

Basic Company Information

These elements will provide you with the essentials regarding the company and their contact details.

1. Company Name
2. Company Address
3. Company Contact Number
4. Company Email Address
5. VAT/GST Number
6. What type of entity does your business categorize itself as?

Primary Company Contact Information

This information is to be completed by the person who will serve as your direct point of contact within the company. 

7. Full Name
8. Address
9. Mobile Number
10. Email Address
11. VAT/Tax File/IRD Number

Company Director Contact Information

The same information from the previous section is required from the Company Director, as he/she may need to be contacted at any point during the process.

12. Full Name
13. Address
14. Mobile Number
15. Email Address
16. VAT/Tax File/IRD Number

Company Bank Information

Here, you’ll be able to collect the necessary company bank details.

17. Bank Name
18. Bank Branch Address
19. Account Number
20. IBAN/Swift Code

Initial Required Documentation

These forms of proof required from the customer will confirm their information thus far and provide additional security. 

21. Certificate of Incorporation (for Companies, LLP, Trusts)
22. Document displaying GST/company tax number
23. Confirmation of company address 
24. Scans of valid forms of ID of Primary Contact and Director
25. Documents displaying VAT/Tax File/IRD Numbers of Primary Contact and Director

Key elements of the KYC process

The KYC process varies from one industry to another, but it always relies on three main elements. You should bear these in mind because they can help you design a more comprehensive checklist:

Customer Identification Program (CIP) 

The first element involves collecting and verifying information to confirm the identity of your client. Key information typically includes full name, date of birth, address, and identification number.

Customer Due Diligence (CDD)

You also need to assess the risk associated with the customer. This is done by gathering information about their financial background, the nature and purpose of the business relationship, and anticipated account activity. 

Ongoing monitoring and reporting 

Continuous account activity and transaction monitoring are the only way to detect suspicious behavior or anomalies. Financial institutions must report any suspicious activities to the relevant authorities in compliance with legal and regulatory requirements.

Should I create my KYC checklist digitally?

Yes, you definitely should create your KYC checklist digitally. A multitude of organizations have begun switching from paper KYC checklists to electronic ones, and for good reasons. 

It’s faster  

Having to undergo both the initial onboarding process and the KYC verification process could mean that customers are left waiting for long periods of time before everything can get started. 

As far as customer experience is concerned, this is not ideal and can leave customers feeling frustrated and disappointed that they don’t seem to be a priority. This type of situation could even drive them to go with another service provider instead.

Keeping everything digital will save time for both parties and allow the professional relationship to begin promptly and positively. 

It’s easier for customers

Receiving a KYC checklist in the mail, filling it out and either having to mail it back or travel to the company headquarters to deliver it is an absolute burden for any customer. 

Convenience is key to keeping your customers satisfied. A digital experience will help keep everything running smoothly from start to finish.

It’s more efficient 

In the long run, running your KYC process online is a lot more cost effective.

You should be paying your highly-skilled employees to do the things that they’re best at, which doesn’t include spending hours collecting information from your customers. 

What platform should I use to create my KYC checklist?

There are more tools available for basic form creation than you can shake a stick at, however, few of them are suitable for KYC checklists, as they may present too many restrictions. 

Our suggestion is to try Content Snare because it can help you gather exactly what you’re looking for in a fraction of the time it would normally take.

There’s no need to train or practice when you first begin using the software — simply sign up for a free trial and you can get going immediately. The same applies to your clients, as there’s absolutely no learning curve — even the most technically-challenged users can understand the platform’s simple interface.

Related: How Day One Advisory boosted efficiency and saved time using Content Snare

Both yourself and your clients receive automatic reminders and notifications throughout the process, ensuring everyone’s in the loop regarding any progress made and what’s still to be done. 

As a KYC checklist may contain sensitive data, security is an important factor to take into consideration when selecting your content collection tool. Content Snare adheres to industry security standards including encryption, authentication and attack protection, making it a safe space for your clients to provide their details.