{"id":7235,"date":"2022-08-05T09:11:07","date_gmt":"2022-08-05T09:11:07","guid":{"rendered":"https:\/\/signdesk.com\/in\/?p=7235"},"modified":"2025-09-17T07:31:13","modified_gmt":"2025-09-17T13:01:13","slug":"all-about-kyc-verification","status":"publish","type":"post","link":"https:\/\/melento.ai\/en-in\/blog\/all-about-kyc-verification","title":{"rendered":"What Is KYC Verification? Everything You Need To Know About KYC Verification"},"content":{"rendered":"

Know Your Customer or KYC is a set of protocols designed to verify the identity of a client or entity before conducting business with them. The KYC process typically involves collecting certain information from a prospective client, verifying this information to ensure veracity, and then using this information to estimate the potential business risk of onboarding the client.<\/span><\/p>\n

The KYC verification process<\/a><\/strong> is required by Anti-Money Laundering<\/a> (AML) and Terrorist Financing (TF) protocols the world over to combat illicit activities and financial crime. KYC checks also play a prominent role in data management, workflow automation, and risk management. The KYC information collected from clients can be analyzed to estimate potential risks and create risk profiles.\u00a0<\/span><\/span><\/p>\n

The difference in efficiency when leveraging KYC verification<\/strong> is also sizeable. KYC verification APIs enable businesses to retrieve and verify client KYC almost instantly, with secure verification workflows and easy integration capabilities.<\/span><\/p>\n

KYC verification is not a monolith and may be sub-divided into its constituent processes.<\/span><\/p>\n

The Key Components of KYC Verification\u00a0<\/b><\/span><\/h3>\n

Any KYC verification procedure will consist of four critical components, determining the steps involved in a KYC check. These components are mandated differently according to jurisdictional AML requirements, but the components themselves are unchanging across geographies and industry segments.<\/span><\/p>\n

The four components of every KYC verification process, are –<\/span><\/p>\n

Customer Acceptance Policy<\/b><\/span><\/h4>\n

The first step required to undertake KYC verification is creating a policy. The customer acceptance policy outlines how the business or organization will verify clients, and the rules to be followed while onboarding a new customer.<\/span><\/p>\n

The customer policy mentions the criteria to be used for verification, which documents are acceptable, and other requirements to be adhered to during KYC verification.<\/span><\/p>\n

Customer Identification Program (CIP)<\/b><\/span><\/h4>\n

The next component in KYC verification involves collecting identifying information from a customer and verifying this information to ensure authenticity. The modes to be used for verification such as OCR, APIs, AI-powered document verification, etc, are also laid out in the CIP.<\/span><\/p>\n

The minimum information businesses would require for CIP include – Name, Date of Birth, Address, and ID number.<\/span><\/p>\n

Customer identification may be performed using three criteria –<\/span><\/p>\n

    \n
  1. Possession<\/b> – The customer is verified using something he or she possesses. This could be a photo ID, Officially Valid Documents (OVDs), an OTP received on the customer\u2019s Aadhaar-registered number, etc.\u00a0<\/span><\/span><\/li>\n
  2. Inherence<\/b> – The customer is verified using something that he or she is. This usually refers to a unique biological criterion such as fingerprints, retina, iris, etc.\u00a0<\/span><\/span><\/li>\n
  3. Knowledge<\/b> – The customer is verified using something he or she knows. This could be a password, a private key, a pin, etc.\u00a0<\/span><\/span><\/li>\n<\/ol>\n

    The most commonly used methods to verify individual customers involve furnishing government-issued identification such as –<\/span><\/p>\n