What is perpetual KYC?

KYC stands for ‘know your customer.’ In the business world, just because a company verifies someone’s identity and checks a few of their facts does not mean they truly know and understand their customer. In payroll, businesses go through several steps to ‘know their customers’:

1. Customer identification
   Businesses collect customer information such as name, DOB, address, and ID number, verifying whether the customer is who they say they are and if provided information matches government records.
2. Due diligence
   Businesses gather customer information to evaluate the customer’s risk of engaging in any suspicious activity such as money laundering, fraud, or terrorism. Due diligence also includes knowing how secure the customer’s account (or identity) is against suspicious activities and answers questions of beneficial ownership.
3. Enhanced due diligence
   When due diligence processes suggest that a customer has a higher risk profile, firms must collect additional information to build a deeper picture of the customer. Due diligence can also include the ongoing monitoring of high risk customers.

What does KYC entail?

Traditional KYC doesn’t always factor in how customers change over time or how regulation requirements change over time. Companies also typically save stringent KYC procedures for customers who have risky profiles or those who raise certain flags.

What is the advantage of perpetual KYC?

Companies can run perpetual KYC with an AI-based approach that uses automated advanced analytics to gather and analyse behavioural and identity data and spot anomalies that might indicate suspicious activity. Perpetual KYC technology can also include machine learning functions that plot the expected behavioural trajectory and risk profile of an account to present a detailed view of the customer in a more enduring and meaningful manner. Not only does perpetual KYC offer an early warning system for suspicious activity, it also provides companies with a compliance profile that’s built for potential future legislation changes.