As technological advancements are transforming the world’s order as well as business models, the same innovations are empowering fraudsters to exploit digital operations for their personal gains. To fight fraud and secure the digital ecosystem, regulatory authorities have come up with Know Your Customer (KYC) regulations that are made mandatory for all businesses, particularly financial institutions. For instance, the Financial Crimes Enforcement Network (FinCEN) imposed a new requirement in May 2018 on banks that they need to verify the persons’ identities of legal entity clients who control and profit from businesses when opening accounts of users. 

In addition to the efforts made by regulatory authorities, SaaS providers have also emerged with smart identity verification solutions, aiming to help businesses meet KYC obligations. One such example is the KYC document verification system, which can determine the true identities of global customers without affecting the customer onboarding experience.

Here’s a detailed overview of the KYC document verification and the regulatory requirements that businesses might need to know.

Requirement for KYC Document Verification

KYC document verification is an internationally enforced regulatory obligation in the financial sector. According to the Financial Action Task Force (FATF), a global organization that monitors money laundering, validating a customer’s identity must be done using trustworthy, independent source documents to prevent these cybercrimes.

What Kinds of Documents are Necessary for KYC Verification?

An essential KYC step is obtaining the required ID documents from customers during onboarding. Users must verify their identities by submitting KYC documents that include verification of name and proof of address to abide by money laundering legislation. The same regulations apply to businesses and other types of legal entities. Additionally, individuals might need to provide proof of their income when requesting specific goods or services. 

The following samples of KYC document verification and validation are acceptable:

  1. Identity card
  2. Passport
  3. Insurance documents
  4. Driver’s license
  5. Utility bills

Income Documentation:

  • Account Statement
  • Paycheck sheet
  • Return of income taxes

KYC Documentation Evidence for Businesses and Other Legal Entities

The KYC document needed for firms and other legal structures might vary from the legal structure of the company verification document.

 For instance, show the phases of corporate KYC documents that may be required in addition to individual user identity:

  • Business registration documents
  • Bank statements 
  • UBO’s Identity documents 
  • Business operational licenses 

According to FATF’s recommendations, identifying people in the financial sector. It can be made simpler, less expensive, and more secure with trustworthy and adequate digital ID verification solutions. Digital businesses can decrease human control, measure weaknesses, and comply with transaction monitoring requirements using digital ID. Moreover, the following are typical instances of digital identity e-verification documents that can be utilized as a part of the KYC process. According to FATF:

  • Using biometrics to identify and/or authenticate people
  • Digital platforms, protocols, and Application Programme Interfaces (APIs) that enable online identity authentication
  • Electronic databases that gather, verify, store, and/or manage identification proof, including distributed ledger technology
  • Using digital credentials, it may verify identity for access to applications on mobile, web, and offline platforms

KYC Document Verification – Its Workflow

It connects several third-party KYC and AML systems using AI-based intelligent compliance for  AI document verification. The platform combines data from transaction monitoring systems with KYC documents and all third-party sources to provide a more comprehensive picture of consumers and their risks.

KYC process didn’t risk information being assessed at onboarding and then revisited regularly depending on that initial level problem. However, abandoning the conventional, cyclical approach to evaluations can be sparked by modifying the user’s transactional behaviour and risk score.

Key steps involved in the KYC document verification procedure:

  1. Extract information from a variety of IDs, including passports, driver’s licenses, and other global document verification provided by the government.
  2. Check the ID document’s validity and authenticity.
  3. Obtain the client’s facial biometric information.
  4. The customer’s identification is verified by comparing the biometric information with the ID document.


No doubt, cybercriminals are exploiting the financial industry which is damaging the global economy badly. However, KYC checks are required in every small or big organization to prevent fraud and get rid of scammers who affect all industries worldwide. Businesses need to secure their operation by integrating  KYC document verification to fight against fraud, money laundering and cybercrimes. The only solution which can help companies to stay compliant while ensuring risk-free digital services