KYC: What is it and why is it important?

KYC is an acronym for ‘Know Your Customer’ or ‘Know Your Client’, a business process which is used to verify a customer’s identity.

The process is used all over the world and quite frequently too. While KYC verification is often optional for businesses, the procedure is mandatory within the financial trading and online gambling industry.

The UK Gambling Commission, the organisation that is responsible for monitoring and regulating real-life and online casinos in the United Kingdom, ruled that all gambling operators have a legal obligation to carry out the process.

Knowing who is making financial transactions through the platform is a vital step towards the crackdown on money laundering. For instance, a thorough KYC process allows online casinos to understand where funds that players are using for making deposits are coming from and help to ensure that those have not been acquired through illegal means. It doesn’t stop here – verifying a customer’s identity, age, and address allows casinos to stamp down on fraud and provide a safer gambling environment for everyone.

The UK Gambling Commission

While verifying their customers’ identities has always been a requirement for online casinos to obtain a UK gambling license, the Commission has recently released even tighter guidelines.

Online casinos now need to run their KYC process immediately and before players can deposit or withdraw money through their platform. Customers that are solely looking to play demo games now have to register and verify their account.

These new rules came into effect in May 2019 but before that, casino operators were given 72 hours to verify customer identities after registering, allowing players to deposit, wager and sometimes even withdraw. Meanwhile, guests were previously allowed to demo games without having to register and verify any details.

According to the UKGC, the rules were put in place to fight problem and underage gambling and as part of a crackdown on money laundering and fraud within the gambling industry.

The KYC process in detail

KYC generally involves you having to provide the online casino operator with documents that prove your identity, age and address. Generally, most online casinos will require:

• A form of ID: Such as a passport, driver’s license, birth certificate or national citizenship card.
• An address: This can be on a government-sent letter or a utility bill that is no older than three months.

You’ll also find that some online casino operators will require you to provide a document to verify your source of funds as part of KYC. When this happens, you’ll simply need to provide scans or images of the front and back of your debit or credit cards or a bank statement, recent payslips, evidence of pension or proof of winnings from another casino site.

When sending these to the online casino operator, they will have to be clear and show off the entire document. The documents can, depending on the casino, either be directly uploaded to your casino account or sent to the customer support team over live chat or email. After being sent, it can take several days before your account is verified, and that’s if the documents are accepted.

It’s also important to note that when sending these documents, you should censor important information the casino operator doesn’t need such as the middle four digits of your debit or credit card number.

Summary

We hope that after reading through this article you’ve come to understand exactly what KYC is and why it’s important to online casino operators. We understand it can be frustrating as most users just want to get playing but it’s important to follow.