A Guide to KYC Requirements in Australia

The Australian market is highly competitive, and companies invest money and manpower to win over even one customer. Bit by bit, a steady consumer base can form, but only after a long period and understanding for whom you’re producing your product or service. KYC is a method where you know your customers, literally as it stands for “Know Your Customer”, and it can provide vital information when forming your buying persona.

1. KYC and Non-KYC

Some businesses thrive on KYC, while others can work without it. From the industries which have adopted the practice, we can single out real estate, gaming, e-commerce healthcare and even brokerage trading. On one hand, KYC businesses require their potential customers to input personal info such as address, birth date, employment, personal verification documents and other personal information so they can provide quality service and get to know their customer’s needs. 

Non-KYC businesses like online crypto casinos found on don’t require the extra step from their potential customers, as the very nature of crypto guarantees anonymity. Sometimes, users want privacy and complete control over their data, and for them, the non-KYC industries exist. While it may seem practical and faster, non-KYC companies lack adaptability and can’t form long-lasting relationships with their customers, as they can’t get to know them and tailor-make their services.

2. Customer risk assessment

An incredible benefit of KYC is elevating the risk for your company when dealing with new customers. While you are getting valuable information from your customers, which you can use to refine your offer, you can also run a customer risk assessment before you continue business with potential clients. If you own or are associated with a financial corporation in Australia, you’ll be familiar with Austrac (Australian Transaction Reports and Analysis Centre) and its requirements.

By adopting regulations, banks and other financial corporations can identify and research potential clients before making deals. Such steps and data prevent fraud, false impersonation and risky investments for financial corporations, as they can gain insight into the client’s past actions and misdemeanours. Transactions are also monitored, and they can reveal valuable financial information.

3. Costs associated with KYC

All new regulations and technologies have implementation costs. While KYC does provide incredible benefits for corporations, it requires willingness and preparation before implementation. For starters, employees need training, or specialists must come on board. Targeted training aimed at developing the specific set of skills for knowing your customer is one-third of the process, while the other two require technology and record keeping. The customer service assigned to process KYC needs adequate software to harness the data, with corporate policies and data safety for preserving it.

Personal information is precious, and companies must adopt cyber security and data safety so their clients can know their sensitive data is in safe hands. Record keeping is the final step in the process, as on organic extension on the previous step. Australian law demands that companies keep KCY records for at least seven years. The associated data storage costs can pile up with administrative, training, support and tech expenses over the years, so companies need to keep track and be mindful of investments made into KYC.

4. Identity and Document verification

The two most important aspects of KYC are to make identity and document verifications from your potential customers. Preventing fraud and identity theft is easy in our modern AI-powered world, where advanced technologies can easily identify genuine government-issued documents and fake ones. The customer service agent can physically identify customers’ documents, applying training and obvious common sense for hidden signs of identity fraud.

Afterwards, it’s up to the digital software to recognise any potential attempts from customers to falsely identify. Once physical or electronic documents come to inspection, they represent a vital part of KYC. The OAIC (The Office of the Information Commissioner) is responsible for DVS (Document Verification Service) in Australia. This partnership is vital for each company to implement KYC and check each customer’s data against a national database.

Only the central government servers have all the data related to documents from various customers, and if some searches come up positive, that is a sure signal that it’s not smart to continue or start a business with the specific customer. The more information is provided, the more accurate the search and result will be, so diligent research and detailed forms are required from corporations to prevent malicious behaviour and to provide accurate results.

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