Cedar Rose Int. Services Ltd is ISO 27001 certified. Find more details Learn more

How to Really Know Your Customer – 4 Cost-Effective Steps to KYC
1 year ago by Christina Massaad

How to Really Know Your Customer – 4 Cost-Effective Steps to KYC

Share this:

Knowing your customers really well can bring your business many benefits but it is also essential to help you stay compliant too. I’m not suggesting here that you take every single customer out to lunch and get to know them personally, especially at the moment, but whether your customers are people or businesses there are simple steps you can take to get to know them better. 

Leveraging the information you collect will help your business to grow in a more secure and stable way.

1) Check Your Customer is Legitimate.

A legitimate business is one that is officially registered with commercial authorities. A legitimate person will also be registered – so don’t hesitate to ask for verification information when signing up new customers. Most businesses will have a company registration certificate and if they don’t, then ask for the proprietor’s or B2C customer’s passport, driving licence or birth certificate as proof of identity

There are several websites where these can be checked too – more about that in my next article about Identity Verification. Please note that Businesses found on Cedar Rose’s website are all genuinely registered entities.

2) Find Out Who Owns Your Business Customer.

Business customers can be part of complex organisations and it is important to know who is behind the entity you are trading with. If the company is owned by another company, there may be a trail until you reach the ultimate beneficiary owners. 

Many unsavoury individuals such as arms smugglers, drug traders, terrorist organisations and organised criminals use companies as fronts for their illicit deals. If your B2B customer is owned by another company, it may be worth conducting Due Diligence to trace the ownership trail before signing contracts. 

Even if the owners are individuals, it is often worth conducting Global Compliance checks to ensure they are not sanctioned or known criminals.

3) Size Up Your Customers to Know the Business Potential.

A simple Credit Report will give you a wealth of information about your customer, whether they are an individual or a business. For B2B clients you will get a good idea of the size of your customer – are they large, small or medium-sized business? 

Do they have locations in various cities or countries? How many employees do they have? What is their annual turnover? Are they growing or declining? Do they own assets? How long have they been in business? 

All of this and more can be found in a Company Credit Report for less than €70 and you will get a good idea of whether or not they are likely to pay you on time, whether you should consider extending credit at all or always ask for payment on delivery or in advance.

4) Monitor Your Customers to Stay Up-to-Date.

There are several ways to do this – regular contact is useful, give them a call every now and then, send them an email or make appointments to visit them. You could also sign up to a monitoring service when you purchase the credit report and the credit reference agency will let you know by email whenever there is a change to their data. 

Quite often companies get sold, start declining or rapidly growing, go bankrupt or move address and it is so important that you stay up to date with that kind of information – especially if you are extending credit. Knowledge is power after all.

So, once you know they are legitimate, not criminals and seem like a good prospect, taking them out to lunch may not be a bad idea once this isolation period is out of the way – or at least meeting them face to face, even if via a conference call. 

It is really only by connecting personally with your customers that you will understand how you can best serve them. Find out the problems they are facing in their business that you could perhaps help resolve. Understand what they think about the product or service you provide to them, and you will always be better prepared to keep them loyal by continuing to improve. 

Not knowing the customers you are serving could later have a seriously detrimental effect on your company’s reputation or financial situation, so following these 4 steps to KYC compliance is highly recommended.

For more business tips, follow me, or our company page on LinkedIn.

Cedar Rose provides company profiles, company credit reports, due diligence and background screening investigations as well as a wealth of data products and services.

For more information on how we can help you to really know your customer, give us a call today on +357 25 346630 or email info@cedar-rose.com

  • kyc
  • compliance
  • onboarding
  • kyb
  • ekyb
  • ekyc
  • eidv
  • identity verification