Customer identification procedure

What are the requirements for a customer identification program? Who is exempt from CIP requirements? What is a customer identification program?

The minimum requirementsto open an individual financial account are clearly delimited: 1. Identification number While gathering this information at account opening is sufficient, the institution must verify the identity of the account holder “within a reasonable time.

Procedures for identity verification include documents, non-documentary methods (these may include comparing the information provided by the customer with consumer reporting agencies, public databases, among other due diligence measures), or a combination of both. They need to be clarified and codified to provide continued guidance to staff, executives, and for the benefit of regulators. The exact policies depend on the risk-based approach of the institution and may consider factors such as: 1. The types of accounts offered by t. See full list on trulioo. These documents, in general, should display a picture and the nationality of the individual.

However, the FI procedures may stipulate other documents that reach the reasonable standard for identity verification.

Best practices, however, call for furnishing more than one document to offset the risks presented by counterfeit and fraudulently obtained documents. In today’s online era, when consumers deeply value convenience and instantaneity, a trip to the bank to set up an account is a big ask. Indee why place demands on the customer’s time, and require her to physically present herself, particularly when there are easier ways to for an account online? These non-documentary methods are perfectly legal, provide the highest levels of risk mitigation and deliver a seamless onboarding experience.

One method involves “independently verifying the customer’s identitythrough the comparison of information provided by the customer with information obtained from a consumer reporting agency, public database, or other source. This is doable as an online process and is referred to as electronic identity verification (eIDV). There are other non-documentary methods, such as contacting a customer, checking references with other financial institutions or obtaining a financial statement. However, these processes don’t offer the spee convenience and reliability of eIDV. FIs can also combine documentary and non-documentary methods.

One increasingly popular method is using on-demand ID document verificationcombined with eIDV, to crosscheck ID documents electronically with the identity information, to further reduce the risk of fraud. What happens if a person does not have an identity document? Regulations require that the FI’s CIP also incorporate procedures to handle situations where the risk level is higher than usual: For example, what happens when the FI can’t establish the true identity of an individual? When should it not open an account? When can it open the account, but require more information?

It’s not enough to collect identity information – the information must be maintained as long as the customer remains with the FI and five years after. This includes the actual identity information as well as a description of any document that was relied on to verify identity, noting the type of document, the i.

The CIP also applies to corporations, partnerships, or trusts. In these cases, the procedures relate to the verification of the business entity: The existence of the business entity can be established by calling upon certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument. Business verificationis also doable through non-documentary methods.

Similar to how eIDV operates, real-time identification and verification of company records through official registers enables quick and seamless business onboarding. Person considered a “ customer” as defined in the Account Ownership Matrix: a. Date and place of birth. Place of birth is optional but is useful in verifying the SSN’s issuance compared to the year of birth. Identity verification procedures (including procedures that address situations in which verification cannot be performed). The CIP rule requires a bank to obtain a taxpayer identification number from the customer prior to opening an account from a customer that is a U. When the bank’s customer is a trust, what taxpayer identification number should the bank obtain?

The CIP must include risk-based procedures for verifying the identity of each. Basically, a thorough customer identification procedure can set the stage for best practices throughout the entire onboarding process. One variable is how much data is the front desk or the relationship manager responsible for acquiring? Identification of information required to be obtained (including name, address, taxpayer identification number (TIN) and date of birth, for individuals), and risk-based.

KNOW YOUR CUSTOMER AND CUSTOMER IDENTIFICATION PROCEDURE Version No: V. Customer Identification is the start of the KYC process.