Complexities involved in conducting effective customer due diligence

2–3 decades ago, financial institutions or firms that have the obligations to identify and verify their customers, have relied on a single identification (ID) document, i.e. primary ID, to on-board customers. Over time, the conduct of KYC (Know Your Customer) has become more complex and evolved from just obtaining a single ID document to numerous documents or information for the conduct of customer due diligence (CDD) to understand the level of risk posed by doing business with this customer.

Due to this extra information or documents, issues like the customers unwillingness to provide arises as one do not understand why they need to provide such extensive information. In addition, complex corporate structures are especially designed to provide anonymity to the underlying or beneficial owners and these businesses are finding it difficult to conduct customer due diligence (CDD) effectively.

We all know that KYC is a compulsory practice as it forms the backbone of global anti-money laundering and counter-terrorism financing program and efforts. As the KYC requirements are getting more complex, there is a need for businesses to own or subscribe to the latest technology and platform to conduct an efficient and effective KYC (Know Your Customer) and CDD (Customer Due Diligence).

Visit to understand how blockchain technology is utilize on Xenchain platform to transform and shape your KYC practice.

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