Position paper Know your Customer: Retail customer verification in the Single Market

4 July 2018

A feature of many banks and fintechs is that they operate across national borders. This, in turn, poses specific challenges: in the face of digitisation, cross-border companies are increasingly addressing the question of the extent to which processes can be performed uniformly and centrally for the entire company from one EU member state, taking account of national legislation in each case. The primary focus here is on the so-called ‘know your customer’ (KYC) processes. KYC processes mean the collection and verification of data required by law. Of particular importance in this context are EU member states’ anti-money laundering laws, but also tax regulations, e.g. the Fiscal Code in Germany, as well as other provisions that are either purely national or reflect EU law.

KYC processes are a key aspect for all companies operating in the financial marketplace with customer data. Yet different arrangements in EU member states hinder cross-border digital approaches to customer acceptance by entities obliged to comply with KYC requirements (‘obliged entities’).

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