Anti-Money Laundering (AML) regulations, alongside their key components Know Your Customer (KYC) and Know Your Business (KYB), are vital for combating financial crime and fraud.
Non-compliance carries significant penalties; global organisations faced $26 billion in fines between 2008 and 2018. As an authorised payment platform, Ryft is legally obliged to collect KYC and KYB documentation from all account holders.
AML refers to the legal framework of laws, regulations, and procedures designed to detect and prevent money laundering. Money laundering is the process by which illegally obtained funds (for example, from tax evasion, corruption, or terrorist financing) are disguised as legitimate income.
AML legislation emerged due to the growth of the financial industry, the liberalisation of international capital controls, and the increasing ease of complex financial transactions. It involves monitoring transactions for suspicious activity and reporting any findings to the relevant authorities, helping to maintain the integrity of the financial system.
KYC (Know Your Customer) documents are required to identify individual customers, assess their suitability for a financial services account (like with Ryft), and determine the associated risk. This process helps prevent fraud and ensures businesses don't engage with individuals involved in illegal activities.
Required information typically includes Personally Identifiable Information (PII) such as full names, date of birth, address, contact details, identity/social security numbers, driving licence information, and current credit status.
Account owners must usually provide a government-issued ID as proof of identity; some institutions require two forms of ID, such as a driving licence, birth certificate, social security card, or passport. Proof of address can be confirmed with an accompanying document, like a utility bill.
KYC procedures also help businesses understand their customers' financial behaviours and risk profiles, enabling them to tailor services accordingly. All collected data must be securely stored.
KYB (Know Your Business) documentation extends the KYC process to businesses and organisations, gathered to perform due diligence on their legitimacy, such as vendors and suppliers.
The process aims to verify that the business is genuine, not a shell corporation, and that its owners and staff are legitimate individuals not involved in money laundering or criminal activities.
All financial service providers, including Ryft, are required to verify the business's name and address, as well as the names of its owners and directors. This typically includes checking business registration documents, proof of incorporation, tax identification numbers, and other relevant information. Like KYC data, all KYB documents must be securely stored.