You should know that Australia has a population of 25,499,884, and most of them interact with several businesses all the time. With the number of residents in Australia, businesses including Westpac Banking Corporation and ANZ Banking need to tell each of their clients apart or lose a large amount of money.
That is the reason KYC providers in Australia exist. Without them, large companies will have difficulty taking care of their clients all the time. Identifying a client’s identity is crucial, and only KYC providers can provide a system that lets companies and businesses figure out which client is which. Those who do not know KYC might have several questions before they integrate it into their business.
FAQ #1: What does KYC stand for?
KYC is an abbreviation for “Know Your Customer.” As the name suggests, it is a method for businesses and companies to know their clients when doing business with them. Most of the time, customers from Australia would make a phone call to the company, and there is no other way to verify if they are talking to a legit customer or another person trying to scam them.
There is also a set of mandated protocols followed to prevent any financial crime, including money laundering. The KYC also protects the business establishment and other financial organisations from fraudulent activities. If you want to protect the integrity of your company, do not waste time hiring KYC providers in Australia.
FAQ #2: Is KYC essential for every business?
As long as you are a financial institution in Australia, it is a must that you have a KYC to protect your client’s sensitive information and your reputation. Some financial institutions that do not have KYC will have a hard time determining their customers, and they might even encounter tons of fraudulent activities every day.
And in most cases, financial institutions in Australia that fail to verify their customers would end up getting hefty penalties and closing down. Suppose you do not want to encounter hefty penalties and avoid getting sued by your clients. In that case, you should look for a professional KYC provider in Australia before you even start your business.
FAQ #3: What are the three elements of KYC?
Every KYC provider should have the three basic components if they want to achieve effectiveness and security. The three elements include:
- Client Identification – Businesses need to ensure they know who their customers are.
- Client Due Diligence – Businesses need to learn the risks of beginning a formal relationship with a customer. They need to find out how they make a living or what activities you should expect from their account.
- Client Monitoring – Businesses have to monitor their client’s behaviour and ensure they act the way they expect them to be.
FAQ #4: What is a high-risk client?
At some point, you may have a client from Australia that will be doing business with you that has a high public position. Examples of high-risk clients are politicians, military leaders, party members, and senior executives, to name a few. Their information or finances should be taken care of as much as possible by your company because a single error could cause irreversible negative outcomes.
Do not forget to hire KYC providers if you want to keep your business’ reputation intact and avoid losing loyal clients.