Know Your Customer Checklist: The Ultimate Protection from Financial Fraud

With the rise of technology, fraudsters have also become more advanced. They are using different identity theft techniques to deceive individuals. One of the first things a person should consider when working for a financial institution is whether or not they truly know their customers. Yes, they’ve met in person before, but how can they be sure that clients are being truthful about their identities? Illegal activities like money laundering, fraud, and terrorist financing frequently occur worldwide. The organization and the perpetrator face severe penalties depending on when and how the fraud was committed. Unfortunately, not knowing about the offender’s actions does not shield organizations from fines, punishments, and, of course, reputational harm. A firm should make know your customer checklist to better validate the identities of clients. Firms can reduce these risks by sending a KYC checklist to their clients at the beginning of a business relationship. 

KYC Verification Process

The excessive use of new technologies necessitates the development of regulatory standards to combat online financial fraud. The KYC verification process enables businesses to verify a client’s identity and ensure that the users are who they claim to be. By performing KYC checks, businesses can avoid dealing with individuals who are associated with terrorist financing, money laundering, and corruption. Today, the KYC process has been digitalized, so various security checks and services are used to carry out the KYC verification. The different KYC services are defined below:

Document Verification – The individual’s government-issued ID document is checked for forgery or ID theft.

Face Verification – To detect spoof attacks in real-time, face verification checks are performed to ensure the customer’s liveness presence.

Address Verification – A Proof of Address is obtained, which compares the address on government-issued identification documents to the POA.

To verify a customer more efficiently, it is essential to make a KYC checklist. This checklist includes helpful documentation that is required to identify a firm or individual more efficiently and quickly.


Know Your Customer Checklist

The regulations of AML(Anti-Money Laundering) are a set of rules aimed at detecting, deterring, and disrupting criminal activity. The know your customer checklist is a vital component of AML. It is specially created to assist with customer identification and screening. Any business with client risk exposure needs to create a KYC checklist for communicating with clients. An essential checklist could include the following items and supporting documents:

Working with B2B Firms

  • Registered firm name
  • Business nature
  • Address of firm
  • Reference number of firm
  • Contact details of firm directors, owners, and partners 
  • Bank Name
  • Branch address
  • IBAN, Swift code, and account number of the firm

Supporting documents

  • Certificate of occupation, memorandum, and incorporation
  • Audited financial accounts, annual reports, and statements
  • Share structure chart of ownership
  • Firm address confirmation
  • Company’s directors’ identity confirmation

The above information is required when collaborating with a firm, but when working with a single person, the requirements will change accordingly. 

Collaborating with individuals

  • Name
  • Contact details
  • Address

Supporting documents

  • Identity proof
  • Address verification

Identifying the beneficial owner is also necessary if someone else acts on an individual’s behalf.

​​KYC Checklist for Bitcoin

Developing a know your customer checklist for the bitcoin industry is complex because different countries have different perspectives on cryptocurrencies. The FATF identified several KYC red flags to help regulators develop policies that prevent money laundering and other financial fraud. The following are the different unusual activities:

  • Creating multiple accounts with different names
  • Transactions initiated from untrusted IP addresses
  • Incomplete KYC information
  • Clients refuse to show KYC documents 
  • Customers presenting forged identification photographs or document 
  • Users whose names are present in watch lists
  • Customers who regularly update their personal information

Benefits of the Know Your Customer Checklist

The following are some significant advantages of the know your customer checklist in today’s business environment:


  1. Prevents fraud caused by false identities or online scams
  2. Avoid money laundering
  3. It enables lenders to conduct an adequate risk assessment on customers by identifying their assets and financial history
  4. KYC checklist increases customer and business trust, which brings more investment to a country 
  5. It guards against unauthorized third-party access to user accounts
  6. Less financial fraud leads to an increase in the overall growth of business



In order to comply with AML regulations, KYC procedures are a crucial component of customer risk assessment. Effective KYC entails monitoring a customer’s financial activities, verifying their identity, and assessing the risk. Know your customer checklist is part of anti-money laundering regulations. It helps organizations to understand that their customers are who they claim to be. Individuals and organizations have different KYC checklists. A firm must have a registration number, a name, an address, contact information for the owner, and so on. Individuals must provide their name, address, and proof of identity. The KYC checklist helps businesses to avoid money laundering, terrorist financing, and other financial fraud more quickly and accurately.