KYC as a crucial first step in establishing a customer relationship, underscoring its role in preventing identity fraud, adhering to Anti-Money Laundering (AML) controls, and meeting regulatory standards. Increasingly, companies are investing in KYC software that meets the compliance requirements set by various regulations.

KYC refers to the practice of verifying client identities in line with legal requirements and current laws such as AML, GDPR, and eIDAS. As new technologies and the internet become more pervasive, it has become essential to establish standards to combat online fraud. Consequently, the KYC process is a mandatory requirement for any business looking to onboard users as clients, particularly critical in sectors like finance and banking, as well as related industries such as insurance, real estate, trading, and cryptocurrencies.

The document notes that since 2020, due to global health concerns, many companies have had to implement digital and remote KYC processes to continue operations under potential restrictions. While digital KYC procedures have been around for years, having a long-term KYC partner now distinguishes viable businesses from those at risk of obsolescence.The KYC process involves applying a series of controls to ensure that commercial relations are not established with individuals linked to terrorism, corruption, or money laundering. This includes confirming that clients are who they claim to be and granting them access to the necessary services or products. Verification methods vary, but not all comply with legal requirements.

Lastly, the document explores KYC regulations across different regions and industries, such as Europe's AMLD5 (or 5AMLD) and eIDAS framework, along with the 6th Anti-Money Laundering Directive (6AMLD). These define secure digital identification methods for financial sectors, allowing customers to interact remotely with banks, insurance agencies, and administrations.