The creation of the KYC standing for Know Your Customer is the policy applied by the UK to avoid infractions and protect the customers from illegal funds and transactions financial services. This mandatory procedure requires the financial institutions to verify their customers’ identity and stability to not only prevent the possible risks entailed when preserving a business relationship but also widen the bank’s AML anti-money laundering framework. These regulations were originally enforced for financial services only, but today, other industries are also involved. Here are the business sectors that have carried out the KYC in compliance with legal requirements and regulations.

Banks

Under the Money Laundering Regulations Act 2007, the KYC policy must be applied across UK-based businesses and institutions. To prevent criminal and terrorist activities from using financial products or services in this territory, it is mandatory that the financial institutions there apply AML and KYC procedures. In the KYC system, the client who desires to open an account must follow the verification process such as ID card, face verification, and document verification. This latter includes bills supplied as an address proof and biometric verification. Severe penalties must be applied for the banks that fail to comply with these laws.

Shopping Outlets

The retail outlets must also register with a supervisory authority to follow the KYC regulations. As financial crimes can happen in shopping outlets, taking effective measures is paramount for these shopping centres. Thus, retail outlets must take multiple measures in the goal to detect different types of financial crimes. These services are obliged to identify and verify their client’s identity on the basis of documents, information, and data. The minimum KYC requires the malls’ customers to supply their names and identification number of passport, voter ID, and Driving License. If there is a failure to comply with this legislation, the shopping outlets owners may be subject to penal sanctions.

Online Bingo

To maintain transparency and fairness in the online bingo sites, the operators have to find necessary measures. As the iGaming industry is the subject of financial crimes, the great challenge to prevent this serious problem must be applied. The KYC procedure is an effective solution created to avoid illegal funds and transactions. When registering at a bingo site with a no wager option, the players must follow the KYC process before being allowed to cash out their gains. They must supply documents and once the procedure is completed, they can withdraw their winnings. These documents include a copy of the Identity Card, copies of the credit card, and copies of bills that must include the gambler’s address. Although the procedure can take more time, the players are ensured that the bingo websites that provide the KYC procedure are safe and secure.

Surveys

A survey carried out by Arachnys in March 2020, revealed 85% of KYC analysts spent nearly half more time processing data into a usable format. These analysts gave a low rate regarding the firms’ ability to share data internally. As stated by this investigation, the number of financial institutions and companies that used AML investigations and KYC processes has seen a remarkable increase. Moreover, with 156 AML & KYC professionals surveyed, less than half are working in the financial sectors meaning that the procedure requires improvement to make it more effective among the users. The KYC challenge is great because 87% of banks and 75% of investment managers think that regulatory and legislative change is the important factors for their KYC processes.

Conclusion

To answer the question asked at the beginning, the KYC in the UK is established to not steal data. On the contrary, this programme is a key solution to protect players from any financial crime. KYC is a legal obligation applied to financial institutions based in the UK to identify their clients. This scheme is a major element in the fight against money laundering and financial crime. Although this customer identification policy requires an enhancement, it can be said that the process is the first and important step regarding the customers’ protection.