Improve KYC compliance with a customer due diligence checklist

Economic globalization poses new challenges for countries working to prevent, identify, and track illegal financial transactions. In response, many countries have established Know Your Customer (KYC) regulations. 

In this article, we’ll share a KYC checklist to guide you through the customer due diligence process. We’ll also explain how to improve the customer experience by using co-browsing software during the KYC verification process.

The KYC verification process

KYC regulations require financial institutions and online businesses in specific categories to verify their customers’ identities. 

The means of verification vary by country, but countries like the United Kingdom and the United States require institutions to establish and follow customer due diligence (CDD) procedures before opening an account. 

Customer due diligence

In the US, the CDD Rule requires written policies and procedures to:

  • Identify and verify the identity of customers
  • Identify and verify the identity of the beneficial owners of companies opening accounts
  • Understand the nature and purpose of customer relationships to develop customer risk profiles
  • Conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information

At a minimum, these procedures must allow the institution to:

  • Develop an understanding of the nature and purpose of the relationship sufficient to establish a risk profile
  • Conduct ongoing monitoring to flag questionable transactions
  • Update information as needed

The level of CDD required varies based on risk profile:

  • Simplified Due Diligence is sufficient when the financial institution determines that the client’s risk profile is low.
  • Basic Customer Due Diligence is the standard set of information required to assess risk and verify a customer’s identity. 
  • Enhanced Due Diligence is necessary for customers that present a higher risk.

KYC checklist

The required information varies by country, but generally, your KYC checklist will include information like the following.

Customer due diligence checklist for individuals

For individuals, the information may include:

  • Full name
  • Date of birth
  • Residential address
  • National identification number
  • ID expiration date
  • Copy of ID
  • Phone number
  • Email address

KYC documents for individuals

The supporting documentation may include:

  • High-resolution scans of an official ID document
  • Proof of address, such as a recent utility bill or a bank statement
  • Tax returns 

Customer due diligence checklist for businesses

For businesses, the information may include:

  • Full legal name and address
  • Company identification/tax number
  • VAT or GST number
  • Status 
  • Personal details of present directors or owners

KYC documents for businesses

The supporting documentation may include: 

  • Certificate of incorporation 
  • Proof of company address, such as a utility bill
  • High-resolution scans of an official ID document of the director(s) and the contact person
  • Tax return statements of the company’s director(s) and the contact person

CDD checklist for high-risk accounts

If a customer’s risk profile indicates that enhanced due diligence is required, an institution may decide to collect additional information like:

  • Source of funds and wealth
  • Occupation or type of business
  • Financial statements
  • Customer location
  • Principal place of business
  • The proximity of the customer’s residence, place of employment, or place of business to the institution
  • The geographical area in which the customer conducts business
  • The expected number of domestic and international transactions
  • Description of business operations (e.g., total sales)

The effect of KYC verification on customer experience

The CDD procedures necessary for KYC verification place a burden on salespeople at financial institutions, most of whom now spend 27% of their working week onboarding new clients due to KYC requirements.

In addition to the time and money it takes to comply with KYC regulations, a survey of 466 Money Laundering Reporting Officers found that most respondents worried about losing customers due to CDD procedures. 

The survey officers were concerned that they would alienate customers. The process also leads to additional friction during the sales process. 

Complete your KYC checklist without hurting customer experience

At best, KYC verification is a nuisance for customers. At worst, it can be intimidating and confusing. And conducting customer due diligence online can exacerbate the problem.

If a customer has technical problems with an electronic KYC (eKYC) process or can’t produce the required documentation, they might abandon their application. That’s why the process needs to be as straightforward as possible. 

But it becomes much easier if both parties are literally on the same page. 

Improve eKYC with co-browsing

Co-browsing enhances the eKYC process by allowing an agent of the institution to open a co-browsing session with the customer to facilitate the verification of customer information and also the exchange and signature of documents.

If necessary (with business customers, for example), the agent can include multiple participants in the same session. That improves customer experience by allowing the agent to walk customers through the KYC process in their browser.

Then, when it’s time for the customer to take action, the agent can give them control of the session to fill in information.  

Video KYC

A co-browsing session also includes voice or video chat, so the experience replicates the in-person interactions that the institution has with local customers. Agents can also use the video chat feature for some of the items on your KYC checklist (e.g., to capture a live photo of a customer). 

The benefits of adding co-browsing to the KYC verification process

In addition to making eKYC verification customer friendly, co-browsing offers a number of other benefits for financial institutions. 

  1. It makes your customers comfortable. Some tools that facilitate eKYC require customers to go to a third-party website. But if you use Surfly’s Co-browsing technology, your customers will be able to launch a co-browsing session from your website so they know they’re dealing with your company and not someone who’s trying to steal their information.
  2. It’s easy to set up. Sometimes new technology requires a team of developers or a lot of training, but that’s not the case with co-browsing. There is no download required and no external software.
  3. It’s fast. Unlike screen sharing technology that is based on sharing pixels, Surfly’s Co-browsing solution takes the code from any website and transmits that to each participant to recreate the website instantaneously. That means customers with slower internet speeds will still have a smooth experience.
  4. It protects your customers’ privacy. Surfly automatically hides fields that contain sensitive information. For example, if a customer needs to enter their Social Security number, Surfly will hide that information from the agent.

Add co-browsing to your CDD checklist

Co-browsing software can shorten the time both you and customers spend completing your CDD checklist. It also makes it easier for sales teams to build long-term relationships with customers which leads to increased customer engagement. So add co-browsing as the first step in your KYC checklist to improve the customer experience.


Chat with an expert