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Step-by-Step Process for Customer Verification (KYC)

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Financial Analyst

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Customer verification, also called KYC, helps businesses confirm whether a customer is genuine. It protects against fraud and ensures compliance with regulations.
Here is a simple step-by-step process that any business can follow.

Step 1: Collect Basic Information

Ask customers to share basic details like:

  • Full name
  • Date of birth
  • Mobile number
  • Email address

For businesses, collect:

  • Company name
  • GST number
  • Registration details

Step 2: Take Government ID Proof

Collect clear photos or scanned copies of any one ID:

  • Aadhaar
  • PAN
  • Passport
  • Voter ID
  • Driving License

This helps confirm the person’s identity.

Step 3: Collect Address Proof

Ask customers for a valid document showing their address. This can include:

  • Utility bill
  • Bank statement
  • Aadhaar
  • Rental agreement

Step 4: Verify the Documents

Check if the documents are:

  • Clear and readable
  • Matching the customer’s details
  • Not expired
  • Genuine (no editing or tampering)

If something looks wrong, ask for a re-upload.

Step 5: Optional Photo / Selfie Verification

To avoid fraud, you may ask the customer to take a selfie.
This helps confirm that the person submitting documents is the same person in the ID.

Step 6: Check for Risk Flags

Do a basic safety check to ensure the customer is not involved in any suspicious activities.
For simple businesses, this can be a quick online search or internal check.

Step 7: Approve or Reject the Verification

After checking everything:

  • Approve if documents and details match
  • Reject if details are incorrect or unclear
  • Ask for more information if required

Step 8: Keep Records Safely

Store customer documents securely.
Follow privacy rules and keep data only for as long as needed.

Step 9: Re-Verify When Needed

If a customer’s documents expire or you notice unusual activity, ask for updated verification.

Why Customer Verification Is Important

  • Prevents fraud
  • Builds customer trust
  • Protects business reputation
  • Complies with basic regulations

FAQ

1. Which ID is best for verification?
Aadhaar, PAN, Passport or Voter ID — all are acceptable.

2. Do I need to collect a selfie?
Only if your business requires higher security.

3. How long should I keep documents?
Keep them only as long as necessary for business or legal needs.

⚠ Disclaimer

This blog is for general information only. Customer verification rules may differ for each industry. Always check your local regulations or consult a compliance expert before finalizing your KYC process.

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