Know Your Customer

pelle edited this page Sep 13, 2010 · 3 revisions

Know Your Customer

Most of the information in here is from this thread

What’s KYC?

Wikipedia on KYC

Why offload KYC to independent providers?

KYC companies could offer a service where they use whatever technique
is best in their country to perform Know Your Customer. In some
countries this could be using national Identity cards. In others it
could be scanning and uploading id and proof of address.

The advantage to the FSP as I mentioned is a cost saving but also
allows me to offer services outside my national market. I could start
a bank and immediately have access to customers wherever there is a
KYC provider. Even PayPal would be a potential customer here. Look at
their supported country list https://www.paypal.com/worldwide/. I’m
willing to bet that most of the reasons they don’t allow Receive in so
many countries is because they haven’t solved the KYC issue there yet.

A super simple service that might work well in many third word
countries could be an agency network. The same franchise networks who
now do Western Union/MoneyGram are perfectly equipped to do in person
ID checks of national ID cards.

Open KYC Workflow

  1. User logs in to financial service provider using openid (http://openid.net)
  2. An account with limited rights is created
  3. The user is then redirected to an independent financial service
    provider of his choice using the OAuth Token Dance (http://oauth.net)
  4. The “Know Your Customer” (KYC) logs the user in using openid
  5. KYC provider asks the user if he/she wants to share their personal
    information with the financial service provider.
  6. If User has already registered once with KYC provider the user is
    redirected back to financial service provider who can now access a
    hcard* page of users details
  7. If User has not registered with KYC before the KYC process starts.
    See comment below.
  8. User is redirected back to financial service provider
  9. When KYC process is complete it pings the Financial Service
    Provider to let it know the data is available
  10. When FSP has KYC data they lift restrictions on account

*a hcard is a HTML microformat for vcard data — see http://microformats.org/wiki/hcard

Details provided to the client (OAuth: Consumer)

With regards to what the minimum details are. It is probably country
specific. My guess would be the minimum a bank asks you for.

  • Name
  • Address
  • Phone number
  • Address
  • Email
  • National ID Number

Instinctively I’m scared by having national ID’s floating around.
Maybe (I’m just thinking out loud) as part of the regular KYC you just
certify to the FSP that you have their verified ID number on file.
Then you could charge them extra for a copy of it, if they need it for
tax reporting etc.

Specific Countries

Germany

Synoptical documents

On delayed verification (post account creation)

http://bundesrecht.juris.de/kredwg/BJNR008810961.html

Abweichend von § 4 Abs. 1 des Geldwäschegesetzes kann die Überprüfung der Identität des Vertragspartners und des wirtschaftlich Berechtigten auch unverzüglich nach der Eröffnung eines Kontos oder Depots abgeschlossen werden. In diesem Fall muss sichergestellt sein, dass vor Abschluss der Überprüfung der Identität keine Gelder von dem Konto oder dem Depot abverfügt werden können.

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