What KYC documents should a company request?

KYC (Know Your Customer) is much more than a simple regulatory obligation linked to the fight against money laundering and the financing of terrorism (LCB-FT or AML - Anti-Money Laundering), it is a strategic process for companies. It enables them to secure their transactions, build trust with their customers and avoid the risks associated with dubious business relationships.

By clearly identifying their customers and verifying their legitimacy, companies protect not only their reputation, but also their operations in the face of legal, financial or ethical threats.

In June 2024, BRED (Banque Régionale d'Escompte et de Dépôts) was sanctioned by the ACPR Sanction Commission with a reprimand and a fine of 2.5 million euros, for non-compliance with LCB-FT* legislation. This case illustrates the heightened vigilance of French regulators, such as the ACPR, in the face of breaches of the regulatory framework, and their willingness to sanction KYC failures in an exemplary manner.

While the KYC process is relevant to individuals, this article is specifically aimed at companies that need to set up a process. We will detail the KYC documents required for companies, before exploring how solutions such as the digital identity wallet can simplify and optimize this process.

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What KYC documents are required?

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In order to meet legal and regulatory requirements, companies need to collect specific documents to verify the identity and legitimacy of their customers, whether they are natural persons (individuals) or legal entities (companies). In the case of legal entities, this process is often referred to as KYB (Know Your Business). KYB (Know Your Business)a variation on KYC adapted to companies.

Although all companies are required to comply with KYC/KYB obligations, these steps are particularly widespread in financial sectors, such as banks, fintechs, insurance companies and payment service providers. These industries, which are more exposed to the risks of money laundering and the financing of illicit activities, need to follow enhanced standards to protect their operations and ensure compliance.

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KYC documents for individuals

Required documents	Examples	Why are they necessary?
Identity documents	Passport, identity card, driving license, residence permit, full birth certificate	Companies must ensure that each customer is who they claim to be. They require one or more official identity documents, valid and issued by authentic sources (official body or competent authority recognized by the State).
Proof of address	Credential official proof of residence (town hall, prefecture), recent bill (energy supplier or telephone company), rental lease, title deed	These documents verify the address provided by the customer and ensure that he is not concealing his actual location.
Financial or revenue documents	Tax return, recent bank statements, latest tax assessment, pay slips, proof of non-salary income (rental leases, financial income), Credential CPAM entitlements	These documents are sometimes required to assess the customer's solvency, particularly when opening complex accounts such as investment accounts.
Business-related documents	Credential employment contract, certificate of self-employed status, diploma, CV	Necessary for verifying professional declarations and, in certain sectors, validating skills or authorizations to exercise a regulated activity.
Other specific documents	Family record book	Used to prove family ties for transactions such as inheritance, donations or personal guarantees.

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Special case: politically exposed persons (PEP)

For higher-risk customers, such as politically exposed persons (PEPs), additional documentation may be required as part ofEnhanced Due Dil igence (EDD). The aim is to enhance transparency for customers whose position or activities present an increased risk of money laundering or corruption.

These documents include, for example :

Financial audit reports,
Proof of source of funds,
Credential of legal non-involvement,
Documentation related to public or political mandates,
Information on close relations.

Today, the majority of companies still have to manage their KYC processes manually, by asking their customers to send PDF documents or scans by e-mail. This is not only time-consuming, but also prone to human error and data authenticity risks.

On the other hand, innovative solutions such as the digital identity wallet help to streamline this process. Companies can receive documents in the form of forgery-proof digital credentials and check their validity instantly. This greatly simplifies the customer experience, reduces operational costs and improves compliance by making verifications more reliable and secure.

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The digital identity wallet: a solution for streamlining corporate KYC

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For 52% of financial institutions, a standard KYC review takes between 61 and 150 days**.

Faced with the complexity and administrative cost of traditional KYC, the digital identity wallet provides a simple, effective solution to streamline and accelerate the Know Your Customer process.

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Combating document fraud

With their wallet, companies can verify the identity of their customers by means of digital credentials (for example, an identity document or proof of address). These attestations are offered in wallets, as in Archipels Businessare forgery-proof.

For example, a proof of address will come directly from telecoms operators or energy suppliers, guaranteeing its authenticity. This approach enables companies to quickly and reliably verify the information provided, reducing the risk of fraud while meeting regulatory compliance requirements.

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Save time and simplify verification

These documents, in the form of attestations, can then be reused for each new interaction, eliminating the need for multiple entries or validations. This considerably reduces the time and resources required for onboarding, while also lowering the prospect abandonment rate: lead times for accessing services are cut from several days, or even weeks, to just a few minutes.

Where previously documents were sent by email without any guarantee of authenticity, with the wallet the information is verified as having been issued by authentic sources.

According to a study by ABBYYstudy, 37% of companies believe that poor onboarding is costing them important business opportunities.

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Europe's regulatory obligation

The digital identity wallet is regulated by the European Union through the EUDIW (European Digital Identity Wallet) initiative and the updated regulation eIDAS 2.0. This regulatory framework aims to standardize and secure the use of digital identities in Europe, making the wallet imperative as a means of authentication and identification to services in many sectors (notably banking and financial services).

As European players will have to adopt this type of solution by 2027, it becomes strategic for companies to prepare now by integrating the wallet into their KYC (Know Your Customer) processes for individuals, and KYB (Know Your Business) for legal entities.

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Conclusion

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KYC documents are the cornerstone of corporate compliance. They enable the identity and legitimacy of customers to be verified, and are essential for compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. They also guarantee total transparency and protect against the legal and financial risks associated with fraudulent or non-compliant customers.

However, collecting and verifying this information can be complex and costly. In the banking sector, for example, where KYC is particularly critical in preventing the risks of money laundering and illicit financing, a solution such as the wallet makes perfect sense. By streamlining document verification and offering a better customer experience, banks can meet their customers' expectations while reducing operating costs and remaining compliant.

To find out more, read our blog post on the importance of KYC for the banking sector, its specific challenges and obligations.

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* Source : ACPR - Banque de France

** Source: Global KYC trends in 2022 (Fenergo)

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