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Importance of having KYC Process in Financial Institutions

· kyc process,e kyc process

KYC is a process where institutions take down all the information about the identities of their customers or clients. Especially the financial institution required to undergo the process of e KYC verification online periodically. It reduces the risk related to any financial fraud. The details of the KYC may include the legal status of the person, signature for the name. 

Every non-banking and banking financial institution has to go through the KYC process. The process helps avoid severe reputational and financial penalties imposed by the regulators. The banking or the financial institutions need to be diligent while handling their clients or customers. The KYC verification process happens to be one complex process. It involves the collection of a variety of documents.

In addition to that, the documents needed for the verification process include the identity proof issued by various governmental organisations. These documents establish and verify the identity of their customers while screening some kind of information about their customers. It helps them to estimate whether their customer is reliable or fraud. The bank needs to imbibe the customer profile and understand the various ways of accessing the account.

Importance of KYC Process

In the bank, the importance of KYC is far-reaching. It helps the institution to establish trust with its customers. It also allows the institution to understand the varied nature of their customers' activities. The KYC verification process also offers added protection against any kind of financial fraud or losses. Moreover, every financial institution gets the benefits of the KYC verification process by getting rid of the money laundering risks. 

In addition to that, the process helps these institutions to standardise the various onboarding processes. Due to this, it becomes quite easier to monitor the customer's behaviour based on the risk profile. However, if you do not undergo the process of KYC verification online, the institution would not let you indulge in various financial products like loans or investments. Once you go through the process, you need not go through it again.

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