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What is KYC/AML and Why is It Necessary

26 Nov 2021 | Financial security

When it comes to the overall importance of financial security, many people make the mistake of believing that it only revolves around the benefit of the service provider. Actually it makes the process as safe as possible for both the client and service provider throughout the whole process.

Of course, there’s also the matter of user interface. The more inconvenienced the client is during the KYC process the easier it will be for them to actually ditch the services and instead opt for someone else that can replace the negative experience with feelings of ease and safety. 

At the end of the day, financial security is a must and gaining the user’s trust and acceptance to invest in the services. And this brings us into the actual purpose behind this post and that is the overall importance of KYC which most people don’t consider in the long run. But what is KYC and how does it tie into the concept of financial security? That is what we’re here to find out. 

 

What is KYS/AML? 

Essentially, KYC, or Know Your Client if you will, is a standard that literally makes sure that the investment advisors know everything there is to their risk tolerance, investment knowledge and of course, their overall financial position. 

KYC really just represents the bridge that makes sure that both the client and the investment advisors are safe, it represents the crutches that help the two stand as one without the fear of anyone being scammed or taken advantage of. 

KYC protects the clients by actually making sure that their investments are worth their money and most importantly, that regardless of what happens, this is the best choice for them to make at the moment. 

But KYC doesn’t just protect the clients alone, it also protects the investment advisors as through KYC they can easily tell what they can and can’t use in their client’s portfolio. Without it they’d definitely have a harder time which is why it’s such a great tool to make use of. 

But hey, if that didn’t answer your question you should know that it all boils down to this: 

  • It is an ethical requirement which ensures that the clients are safe during the opening and maintaining of their account
  • Through it both the broker-dealer and the customer can rest assured knowing that they’re both on safe grounds during their transactions
  • Although it is more of a moral and ethical regulation, it very much is also a requirement for the broker-dealer without which legal actions can come into play

The process of verification that makes sure that the identities provided by the customers are legit is a great way to make sure that there is no foul play involved in the following transactions. This all boils down to AML, or Anti-Money Laundering and other financial hazards.

The more security there is to the process, the more legit the process should look for both the client and the broker-dealer. 

In case the financial institutions are also making use of third parties to make sure that they have collected all of the data involved in the process including the collecting and the verification of customer profiles, the financial institutions are required legally to also specify any risks that may come from this process altogether. 

In order to make sure that this process is legit they will need to make sure that the third parties adhere to the AML and Customer Identification Program requirements which the third parties need to get tested for on a yearly basis. 

 

The Connection Between KYC and Cryptocurrency 

As we all know by now, cryptocurrency is one of the most widely praised concepts of the 21st century and that’s a fact. Over the years we have found countless reasons as to why the mere idea of cryptocurrencies represents the future altogether, but the one problem that most people have when it comes to it is the lack of security that stems from it. 

This is why KYC is so important right here, without that added level of security there is no way to make sure that the client and the broker-dealer will provide each other with their promised goods which may in turn result in one of the two parties losing a lot. 

The KYC standards can really make or break a deal which is why so many more people are pushing towards implementing them into the mainstream crypto world. 

There has even been an attempt to propose that all digital assets including cryptocurrencies owners are to submit, maintain and verify their customers’ identities although we don’t know for sure whether this will be implemented in the near future or not. 

 

Why the Guardarian’s Security System is Trustworthy 

The main reason as to why the Guardarian’s security is so reliable is because it perfectly adheres to the aforementioned KYC and AML requirements. This is what you can expect from the Guardarian’s security system: 

  • Speed – Nobody likes to spend a long period of time registering for a website, which is why the Guardarian focused on making the process as fast as possible 
  • Simplicity – A lot of other platforms actually end up making the process all the harder to work through which is why the Guardarian opted for an easy-to-use process which makes it very effortless to go through the motions
  • Security – As mentioned previously, the more secure you are on the platform, the more you can actually focus on the process as opposed to fearing the repercussions of your actions. The Guardarian more than makes up for this by providing the client with all the safety they could ever ask for. 

Guardarian’s process is as simple and secure as this: 

  • Head to https://guardarian.com/
  • Select the Fiat currency and the amount you wish to exchange (You can instantly see the details behind this exchange pop up to make sure that you on the right path) 
  • You will then be asked to provide us with your phone number for customer verification 
  • Afterwards you will need to verify your identity by sending us a picture of your passport, your driver’s license, your ID card or your residence permit 
  • Next up you will need to verify your identity by photo
  • Lastly you will need to make the payment through your bank account

 

Conclusion

In conclusion, the main reason as to why KYC and AML are so important is the fact that without them you don’t have any leverage when it comes to your transactions online. 

This especially applies to cryptocurrencies as without these two regulations you can never know whether your information is secured or if the website that you’re investing into is making proper use of your data. 

So, stay safe, always opt for a website that actually provides you with all of the steps we mentioned above. Guardarian always makes sure that you are safe and sound, so never go for a website that doesn’t offer all of the security steps we mentioned above to maximize your profits and minimize any potential threat you could encounter online.