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KYC, pKYC and Customer Due Diligence

CDD is a key part of AML compliance, and KYC should be the first step in any considered risk-based approach. SmartSearch’s technology simplifies CDD and KYC for quick and accurate results.

SmartSearch enables comprehensive CDD & KYC checks

SmartSearch can perform KYC checks on both domestic and international clients, confirming identities in over 200 countries using our electronic verification software.

Perpetual Know Your Customer (pKYC) is a more dynamic all-encompassing KYC solution thought to be the future of risk management strategies.

Let’s get to know exactly how SmartSearch can enable your business’s KYC checks.

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Conduct comprehensive KYC checks in 60 seconds

As an AML-registered company, you’ll understand the complex and time-consuming process of Know Your Customer checks. If you’re looking for a streamlined process, faster onboarding, improved customer experience and lower operational costs, we’ve got the solution for you.

Harness the power of our innovative software and breeze through difficult compliance checks in minutes, not weeks.

We offer a multifaceted AML and KYC solution, TripleCheck — a comprehensive electronic service incorporating three thorough approaches to hi-tech verification, which are:

1. Identification, verification, and screening

2. Facial recognition

3. Digital fraud checks

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Meet our AML and KYC solution: TripleCheck

Minimal input — maximum output

To complete a full AML check on a customer, just enter their name and address into TripleCheck and leave the system to do the heavy lifting for you, as an individual AML check will be conducted in fewer than two seconds.

In assessing the customer, the software will check their records against those on over 1,100 databases, including PEP lists and sanctions lists.

Advanced document verification

TripleCheck’s second level uses Optical Character Recognition (OCR) and biometric facial recognition technology to rapidly analyse photo identity documents provided by the customer.

The system can alert you if it detects any suspicious discrepancies between this document and the ‘real person’.

User-friendly interface

Though many cogs are turning beneath the surface when TripleCheck is in full flow, the user interface remains delightfully intuitive to use.

Staff members at all levels of your business will easily be able to use TripleCheck to perform customer checks as and when necessary, making for a user-friendly solution.

Confirm identities in over 200 countries

If your business targets a range of international markets, rest assured that SmartSearch enables you to carry out efficient KYC and AML checks on customers based across various territories around the world rather than just the UK.

Our platform uses the Dow Jones Watchlist, which comprises over 1,100 worldwide PEP and Sanctions lists. Updates are taken every night ensuring you can continually monitor your customers for peace of mind.

Once you have completed a customer assessment with TripleCheck, you will have access to an automatically generated AML certificate confirming the findings. This will be useful for your record keeping, as the certificate will also be saved to the central SmartSearch platform.


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Get the help you need

SmartSearch offers a one-stop-shop for all your firm’s AML requirements. The user-friendly system enables staff at any level to successfully run AML checks, and we are constantly updating and improving the platform to ensure it remains the leading AML solution on the market.

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Customer Due Diligence and KYC

KYC (or know your customer) checks, are background checks that should be carried out as part of your risk-based approach. The KYC process involves the verification of the customer’s identity, using documents like photographic ID, proof of date of birth and proof of address. This can be done manually, with physical documentation, however, this is not only time-consuming but can be subject to human error. It is faster and more reliable to do it electronically, with data sourced online.

What does customer due diligence mean?

Customer due diligence, or CDD, is a longer process which continues after the customer has been onboarded, and includes checks like sanctions and PEP screenings, to continuously assess the risk level that a customer poses to a business.

Both KYC and CDD are crucial aspects of AML compliance. Regulated firms must identify and verify anyone they work with, to ensure they don’t unknowingly become involved with a business or individual with a history of financial crime or sanctions.

Customer due diligence procedures are a core element of anti-money laundering regulations

The AML regulations applicable in the UK are derived from a patchwork of domestic and international laws, of which the main ones are outlined below: 

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017):

This legislation has been amended multiple times since it was originally passed, and specifies various AML requirements for UK businesses to meet.

Financial Services and Markets Act 2000 (FSMA):

This established the Financial Conduct Authority (FCA) as the UK’s main AML regulator, which is responsible for ensuring UK financial services institutions’ AML regulatory compliance.

Proceeds of Crime Act 2002 (POCA):

This law defines money laundering offences which would constitute criminal conduct. POCA also outlines penalties for these offences and obliges companies to report suspicious activity.

Though the FCA remains the UK’s primary AML regulator, several other law enforcement agencies also enforce AML regulations as well as share the FCA’s responsibility of investigating criminal activity in the UK financial sphere. These bodies include:

HM Revenue & Customs (HMRC)
National Crime Agency (NCA)
Serious Fraud Office (SFO)

Additionally, there are some industry-specific regulators — such as the Gambling Commission and Solicitors Regulation Authority, which focuses on AML compliance processes in gambling businesses. 

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How can the KYC process help to prevent money laundering?

The KYC process can be separated into two broad categories: identifying customers and verifying customers. The former involves you collecting personal data from a customer, while the latter involves you checking this data’s accuracy.

For the verification stage of KYC, a business will usually need the customer’s:

Date of Birth

Traditionally, a customer would provide paper documents — for example, an energy bill and a water bill — as evidence of the personal details they have provided. The business would verify those details by scrutinising the documents and confirming their authenticity.

However, there are now automated KYC solutions that extract data from documents and compare them against templates. This can help not only streamline the cost and time involved in the overall KYC process but also eliminate the chance of human error, therefore increasing accuracy.

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Choose SmartSearch’s all-encompassing KYC & CDD compliance technology

Ensure your KYC provider encompasses all of the features you need. While some KYC providers might — for example — offer AML screening but omit the use of facial biometrics, SmartSearch’s innovative platform for AML compliance covers all aspects of KYC.

The core elements of the Know Your Customer process explained 

The exact KYC process steps you take can depend on what KYC tools you have at your disposal. However, here is a basic breakdown of what we would consider the proper KYC steps to follow, enabling you to comprehensively confirm customer identity while adhering to AML regulations.

Though this is traditionally the order in which the steps ought to be taken, technological advances have allowed for a less cumbersome alternative. With SmartSearch’s AML platform, you can run the customer’s name, DOB and address through a full AML check in just a few seconds.

  • Identification

    You would start by asking the customer to provide you with their personal data — which, typically, would comprise their name, date of birth (DOB), and address. You should also ask the customer to provide documents that can act as proof of identity.

  • Liveness check

    The objective here is to verify the customer’s ‘liveness’; in other words, the customer is an actual, living person. SmartSearch’s TripleCheck AML solution uses biometric facial recognition and a Selfie Liveness Video (SLV) for this purpose.

  • Verification

    As it would be risky for you to simply take the customer’s documents at face value, you could first determine their authenticity by looking for the customer’s absence in sanctions lists and PEP lists — a step often casually referred to as AML screening.

  • Address verification

    The customer can provide such proof-of-address documents as bank statements and utility bills, enabling you to ascertain higher-risk customers based on their address alone — such as if it is in a jurisdiction struggling to counter money laundering.

  • Risk scoring

    Once you have undertaken the above checks, you will be able to determine the customer’s risk category. For example, if you establish that the individual is a PEP (Politically Exposed Person), Enhanced Due Diligence requirements will come into play.

KYC checklist: 5 ways to enhance your AML process

You shouldn’t just settle for the bare minimum with your KYC measures — not least because, in doing so, you could too easily risk falling short of compliance with AML regulation. To assist you in optimising your KYC process, here is a checklist of crucial things it should look for.

Basic identifying information

For many customers, this information would include names, addresses, dates of birth, and social security numbers as well as — in the case of corporate customers — company incorporation documents. The information you collect here needs to inform your approach to AML compliance, including risk assessment.

Higher-risk customers

Once you have the above-mentioned identifying information, there will be certain official lists you must compare to assess each customer’s risk profile. The lists will include those of sanctioned people, PEPs, and high-risk jurisdictions.

The nature of the risk the customer poses

This will account for not only the extent of the customer’s risk to your business but also what factors are influencing this risk. For example, a PEP will be more vulnerable to — and so run a higher risk of — corruption and bribery.

Any change in AML risk

As you cannot be certain that this risk will not change at any point during the customer relationship, you should continue to undertake Customer Due Diligence (CDD) as a matter of course.

Accurate insights

Given the administrative challenge of adhering to AML regulatory requirements, you must automate your KYC compliance process. When KYC duties are carried out manually, you can be left with perilously inaccurate customer details.

As you can probably imagine, it can be time-consuming to meet all of these criteria with KYC if it is conducted through manual means. 

However, automated software such as SmartSearch’s AML and compliance solution can time-efficiently accumulate all the information you need for KYC purposes. For a commercial client, SmartSearch can present you with a report covering company structure, persons of significance, and beneficial owners.

Who needs to be following KYC measures?

AML regulations apply to more than 100,000 UK businesses, including:

Building societies
Crypto businesses
Financial services
Accountancy services
Estate agencies
Property Development
Gaming companies
Car dealers

If you are an AML-regulated UK business, you have a legal requirement to use proper due diligence processes in the course of Know Your Customer procedures. This means identifying and verifying the client before screening them against PEP lists and sanctions lists.

If the client’s name matches one of these lists, you must subsequently undertake Enhanced Due Diligence so that you can assess how much risk the client potentially poses.

These are all only initial AML checks — as, after completing them and onboarding the client, you are required to also engage in an AML monitoring process on an ongoing basis. The KYC process is therefore only the first involved in long-term due diligence.

However, it is essential that you meet your Know Your Customer obligations properly. Otherwise, you could risk incurring a fine or even a prison sentence, while your business could become lumbered with reputational damage resulting from negative publicity.

KYC and AML: Key differences & how they work together 

In a casual, colloquial context, you might often see the acronyms ‘KYC’ and ‘AML’ used interchangeably. However, though the two terms do overlap in definition, it could doubtless be helpful for you to unravel these examples of potentially confusing terminology.

AML (Anti-Money Laundering): This umbrella term covers measures AML-regulated firms are legally required to take for preventing criminals from illegally concealing the source of funds obtained from illicit activities like corruption, gambling, and human trafficking. 

KYC (Know Your Customer or Know Your Client): This can be seen as an aspect of AML, as KYC checks are what a company performs to establish that customers or clients seeking to work with the business are genuinely who they claim to be.

Another crucial part of KYC is measuring the risk that customers or clients would pose to the business. Depending on the level of risk, you might have to carry out Enhanced Due Diligence (EDD) before working with the customer or client or rule out striking any deal with them at all.

Hence, while KYC refers to preliminary steps made before a customer is onboarded, AML covers a much broader range of procedures — including ones made over the longer term. At the same time, the business continues to hold a contract with the customer.

How Perpetual Know Your Customer (pKYC) can reduce the risk for your regulated firm

If AML regulations apply to your business, you need to make sure you not only undertake initial know your customer checks on each customer but also, after onboarding this customer, continue monitoring them so that you will be able to pick up on changes to the customer’s risk profile.

To comply with this particular legal requirement, you could — after running the initial KYC checks and forming a risk assessment based on the information unearthed by these checks — repeat this verification process periodically, such as every year or every 18 months.

Under this system, how often you carry out fresh KYC checks on the customer will depend on the risk assessment. However, by switching to pKYC, your business can stay compliant with AML legislation while avoiding the need to periodically re-initiate KYC checks on the same customer.

How does Perpetual Know Your Customer (pKYC) work? 

Perpetual KYC differs from a traditional KYC programme primarily in the sense that customer information is checked — and, as and when necessary, updated — continuously. This means that, if the customer’s status does change, you can be notified especially quickly.

As pKYC is fully automated, you can leave it to run on your behalf while you busy yourself with non-KYC-related work responsibilities. Furthermore, pKYC can tap into all the following data sources:

Utility companies
Phone companies
Email providers
The electoral roll
The Post Office
Your own existing customer data

As a pKYC system will seamlessly factor in massive amounts of data from sources like these, any changes with potential implications for the customer’s risk to your business will be immediately identified, recorded, and risk-assessed. 

Future-proof your business by moving to pKYC for electronic verification (EV) that takes just 2 seconds with SmartSearch, saving your firm valuable time and resources.

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How you can prepare your organisation for pKYC 

The continual nature of pKYC requires it to be electronic. If you are still carrying out KYC processes manually, you can future-proof them by transitioning to electronic verification (EV). You should keep in mind the following facts about how manual and electronic KYC checks differ:

SmartSearch-assisted EV takes just two seconds
Conversely, a manual KYC check takes at least a day
82% of manual Know Your Customer checks last at least two days, while 22% expend over a week
EV uses numerous databases and sophisticated biometric technology to ensure reliability
94% of companies using manual checks lack confidence in detecting fake documentation

Basically, the more electronic and automated your KYC procedures are, the more easily they can help you to address weaknesses in your organisation’s AML compliance. Perpetual KYC also further strengthens the cost-effective pricing structure of SmartSearch’s AML service offering.

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Essential steps for an efficient KYC onboarding process and AML compliance

Though the impact of money laundering is difficult to measure, the United Nations Office on Drugs and Crime (UNODC) estimates that each year 2% to 5% of worldwide GDP is laundered. Here are several steps your business must take to meet AML compliance requirements:

Collect and assess data for customer verification:

This must be done before you enter into any corporate relationship with a new customer — and include collecting at least the data necessary for evidencing the customer’s name, address, and visual identity.

Reference third-party data from reliable sources:

The idea here is to tap into information from a trustworthy independent provider so that you can reliably verify customers. One example of such a provider is SmartSearch, which has ties with multiple data companies.

Use Enhanced Due Diligence (EDD) as appropriate: 

You can ascertain suitable times to implement EDD if you pursue a thorough Customer Due Diligence (CDD) process. Our automated KYC platform can be used to smoothly conduct regular CDD and EDD checks.

Remediate KYC data:

This is another process that SmartSearch can help you to ease. You can establish specific ‘rules’ for running KYC remediation projects, while our automated platform would allow you to time-effectively deliver KYC remediation campaigns in bulk.

Leave a secure audit trail:

When you have at close hand a secure audit trail of all changes and modifications that have been made to the customer record, you can demonstrate to regulators that your business is meeting all the latest AML regulations.

We at SmartSearch offer an AML and compliance platform built to verify individuals and corporate clients based anywhere in the UK — and we throw in full sanction and PEP screening along with ongoing monitoring to make for an extensive overall package.

Experience electronic verification that takes just 2 seconds

Put your customer due diligence in the hands of experts. We can provide your business with a bespoke subscription to our automated AML platform if you get in touch with us to discuss your particular business needs. You can reach us by phone on 0113 537 4042 or email via