Know your client: Hamid-Reza Khoyi introduces the topic

21 October 2021

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Hamid

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Tempo di lettura: 3 minuti

KNOW YOUR CLIENT HAMID-REZA KHOYI - Investing is not so easy, as it is not easy for those who manage the client portfolio to be aware of the person’s history and his money. In order to do their job properly, advisors need to know as much as possible about investors in order to make the most of their money. To do so they have a number of tools including the "Know your client, let’s discover it together with Hamid-Reza Khoyi.

Know your Client: what is it?

The Know your Client is a tool used to verify the identity of a customer and assess potential risks or illegal intentions in the relationship with the customer. Investment advisors, for example, use it to ascertain the financial situation of their clients and that this is not included in the "black list" or otherwise. This tool is also useful for auditors for whom it is called "Understand your Business". In general, the fields of application are many.

There are three steps in the KYC procedure:

Customer identification

At this stage, all the basic information of the assisted person is collected through the compilation of the primary documents. It therefore requires all the user’s personal data and occurs through the use of credentials such as name, date of birth, address, or other documents. At this stage, the modern screening tools of the customer made available by the modern Fintech are also available.

Financial diligence

At this point the customer’s identity is verified and the risk profile is evaluated using the user’s credentials collected. The legal nature of the client, the activity mainly carried out, the geographical area of residence are thus verified.

Continuous monitoring

Performing KYC only in the client’s cognitive phase is not enough. There must be continuous monitoring over time to verify that the information collected initially continues to be valid and that the user behaves correctly over time.

Know your client: Hamid-Reza Khoyi tells you who you are interested in and how to use it

The Know your Client is a freely usable tool in the business world, but there are figures who have the obligation to implement it. These are banks, financial intermediaries, trustee, and industry professionals.

These figures have at their disposal many management technologies to do it at their best. There are directives that require you to prove that you have the software for testing KYC, but everyone is free to adopt the most appropriate degree of depth. Of course, the more you think the customer is a potential risk, the more convenient it is to do a more in-depth analysis.

Important tool to support anti-money laundering

As we have seen, it is a very versatile tool that affects several fields of application, but the first purpose for which it is designed is to support the battles of money laundering. The necessary practices to ensure that illegally obtained money can be used legally, such as insurance fraud, are unfortunately difficult to detect, but the Know your Client, as Hamid-Reza Khoyi says, is an excellent ally.

Now that most operations can easily take place online, adopting KYC becomes more and more fundamental.

Know your customer, the prospects for the future projected by Hamid-Reza Khoyi

The market offers numerous KYC implementation solutions including a wide range of artificial intelligence algorithms that can implement research processes and speed them up without losing efficiency and safety. The future that is slowly showing us technology allows us to look very far ahead.