Know Your Client: Meaning, Requirements, Process and a Checklist

KYC, or Know Your Client, is a quintessential step before embarking on any business journey. There is a list of things you need to check before you sign that contract! But what are they? Why is KYC so important? What’s the process behind it?

Let’s find out!

Oh, and, I have added a free KYC Survey template if you want to try it out. 

Key Takeaways

• Know your client is a regulatory process that must be followed before you confirm a business relationship with a potential client. It will help you foresee risks, obstacles and scope of success of the collaboration.
• Though primarily used in the financial sector, KYC must be a mandatory step for any industry, regardless of the size, type and their target customers.
• The process involves client identification, due diligence, and a thorough identity verification.
• A Know Your Client Survey will help you streamline the data collection process. Plus, you can gather information on the client’s customers!

Why don’t we get started?

What is Know Your Client?

Did you know that the process of KYC started as a means to end financial crimes in the US? Initially, the basic information about the client, or customer was recorded manually, and later through digital platforms. While this met with widespread resistance in the 80s, the KYC guidelines help in keeping money launderers in line, to an extent!

Know your client (KYC) is a must-follow process a business must do before they join forces with a client, or customer. As the name suggests, it is the process of understanding basic information about your clients, verifying their identities, spotting suspicious behaviors if any, and ultimately, ruling out potential risks.

While the process is beneficial for curbing financial malpractices, it also helps you build a close bond with your clients. A chat-like survey is perfect to kick start this process, and your clients will be more than happy to have conversations with you!

Here’s a sample template made with SurveySparrow. Feel free to use and customize it!

KYC Form Template

Preview Template

Use This Template

Know Your Client Requirements

 Oh, look! That’s a pun! 

You get to know your clients through the KYC process. And, at the same time, there are a few things you need to check in order to know their requirements! 

Did you know that more than 856,000 identity theft complaints were filed in 2023? Among them the most common fraud was that of criminal impostors.

Now you know how important KYC is!

These are the components that must be there in the process. Once you get your head around these, the steps will be a piece of cake for you to decode! 

Client Identification

This includes basic information about your clients. It includes name, their date of birth, address, and a unique identification number. This can be sorted with a single proof of identity such as Passport or Driver's License.

Client Due Diligence

CDD is the act of performing a thorough background check of the clients. This is done so that any possible risk can be assessed well and before. Better to nip it in the bud, right? 

This involves verifying if the individual is actually the person who he claims to be

• A thorough check of the state-issued identity card.
• Detailed verification of the ownership of the companies they represent.
• Clearly understand their mode of business and assess any potential risk or clash of interest.
• Report any suspicious activity detected during the verification process. 

Enhanced Verification

Here, you have to cross-check the information gathered during CDD. It’s like a two-step verification process!

Here, the financial bearings, ownerships, liabilities, and funds are examined through a magnifying lens. This step is also called enhanced due diligence as the analysis is done at a deeper level. 

Did you get the gist? 

Know Your Client Questionnaire: 20 Questions to Ask Your Client

The questions you ask your potential clientele decide the future of your business. Both parties must have a clear idea of the business operations and preferences. 

Here are a few questions you must consider asking them to build a better rapport with each other. 

1. Hey! Would you like to tell us about your preferred mode of communication? (Multiple Choice)
2. What are the goals that you aim to achieve with this collaboration?
3. Tell us about the challenges that you face the most in your organization.
4. While taking up a project, do you set any priorities? If yes, could you walk us through the process?
5. Which metrics do you use to measure your performance?
6. In cases of hurdles, how do you handle them?
7. Is there anything you would like to change about your organization or brand as a part of this collaborating with us?
8. What are your plans to grow in the future? We would love to brainstorm strategies!
9. Do you have an action plan for deadlines?
10. The success of a brand is built on its culture code! What is yours?
11. Which part of your daily work routine do you like the most and why?
12. Which part of your work do you dread the most?
13. What do you look forward to the most when you wake up in the morning?
14. What is your decision-making process?
15. In case of clashes within the organization, how do you handle them?
16. What are your expectations from this partnership?
17. Your brand logo is exquisite. Would you like to tell us the idea behind choosing the color combination?
18. Could you tell us a bit about your target audience or customers? Also, can you share their psychographics?
19. Who will be the main point of contact between you and your organization?
20. Is there anything else you’d like to discuss? (Open Ended)

Let’s get started with the process once more! 

How to Create a Know Your Client Form with SurveySparrow

It's easy! 

SurveySparrow’s drag-and-drop survey and form builder make creation the easiest thing. Plus, the AI Builder can create your form in just a few seconds. 

Step 1: Log in to SurveySparrow

Enter the credentials and log in to the account. Don't have one? Get started with a free trial. You can always switch to the free-forever plan, anytime. 

Try it for free! 

Step 2: Create and Customize

You can click on (+) New Survey if you want to create one from scratch or go ahead to Browse Classic Templates to choose the pre-designed template you want. 

Now let's say you chose to work on the template attached above. 

• You can remove the existing questions, add new ones, edit the pre-filled fields, and make the content your own.
• That's not it! Add your logo, change the font, and insert background images, videos, or GIFs.
• You can also use the AI Wing to edit the questions. 

It's as simple as that. 

Step 3: Integrate and Share

Connect your survey with any of the third-party integrations to automate your workflow. Once that is done, reach your audience via multiple channels- SMS, WhatsApp, Slack, or embed them onto an email. 

Wasn't that easy?

Wrap Up!

That's it. Now you know the importance of understanding the pulse of your clients! So, what's the wait for? Follow the procedure and roll out the know your client survey to build a stronger bond.

And, feel free to reach out to us, any time, any day.

Happy Exploring!