Know Your Customer (KYC)-What is it and why is it important?

Correspondent | Tuesday January 17, 2023 06:00

These institutions include banks, medical aid companies, insurance companies, asset management firms and broker dealers as well as credit unions. It is a significant tool in the fight against rampant financial crimes such as money laundering or fraud.

KYC is the fundamental principle behind anti-money laundering and the abolition of terrorist financing. Financial institutions and professionals working within the financial sector ought to know all their customers and their customer’s businesses. KYC helps curb risks associated with financial crimes and also aids in the comprehension of customer behaviours.

The most significant factors of KYC are Customer Identification, Customer Due Diligence and ongoing monitoring. As FNBB we are guided by the Financial Action Task Force (FATF) recommendations, which require that certain measures be taken when opening any customer account.

These include the verification of a customer’s identity.

In addition, the Financial Intelligence Act (FIA) also prescribes the account opening requirements taking into consideration the FATF 40 recommendations. KYC is essentially an international regulatory practice, which is imperative to avoid sanctions. Documents that need to be consistently updated are your identification documents, source of funds, proof of residential address and contact details.

It is imperative to note that whenever these particulars change, you inform the bank to also update their records; for instance, when you change employers, your source of funds will need to be updated.

When you relocate, you will need to submit an updated proof of residential address. The Bank also embarks on annual KYC remediation initiatives to alert customers of their KYC non-compliance and collect updated KYC for security purposes. All customer information submitted to the bank is kept confidential in line with the Data Protection Act. For business customers, the bank requires:

• Board resolution

• Source of funds

• Proof of tax registration

• Business profile

• Company registration documents

• Operation premises registered address

•Identification documents for directors, shareholders and/or signatories,

• Proof of residence for directors, shareholders and/or signatories.

FNBB is an innovative financial institution, which is constantly advancing and keeping abreast with latest trends in the digital space. The bank strives to improve the customers’ experience with banking in the modern-day era. Subsequently, the bank now allows customers to confirm KYC details via cellphone banking. With cellphone banking, customers can now dial *130*321#, select option number 5 and verify that their information is still up to date. This innovation has reduced the extra effort required from customers whose information is still the same. Should there be any changes, individual customers can email updated KYC documents to kyc2@fnbbotswana.co.bw , whereas our business clients can send their updated KYC to kycbusiness@fnbbotswana.co.bw. Customers who have questions or queries are advised to call the 24hr Contact Centre on 0800 302 302. Customers can also visit the KYC Centre at Airport Junction mall for assistance.

The centre is solely for KYC submissions and all queries related to KYC for both individuals and business accounts. Customers are encouraged to consistently comply with this regulation to avoid any inconvenience that may be caused due to non-compliance. Make it a point to look out for the call to actions from service providers that you engage with regarding information related to all things KYC. Remember that KYC protects both company and customers.