KYC (Know Your Customer) is essential for compliance with anti-money laundering regulations and assessing user risk. This process helps you assess the risk associated with each user and make informed decisions about the type of service to offer them.

However, over 73% of financial companies lose clients due to complicated and lengthy KYC procedures. While you can’t skip KYC, you can definitely make the process easier by using easy-to-navigate data collection processes such as KYC Forms. Let’s talk about creating an effective KYC form with a free template to get you started.

 

What is a KYC Form?

KYC processes were created as part of anti-money laundering (AML) efforts initiated globally in response to increasing financial crimes. Over time, KYC has evolved into a standardized compliance practice, particularly in the financial sector, to prevent fraudulent activities.

KYC forms help you collect the information you need to prevent fraud, assess risks, and enforce anti-money laundering rules. They help you build a customer profile for each user, understand who they are, and tailor your services to match their expectations.

Your KYC form also needs to be straightforward, or else you will lose the customers you worked so hard to gain. Your marketing efforts will not be effective not because you didn’t have the right strategy or your products aren’t a great fit for your target audience; you will lose them simply because you overcomplicated a simple task.

Essential Content of a KYC Form

The specific requirements can vary based on the country, industry, and type of financial institution. However, here are the most common elements:

• Personal Information: Customer’s full name, date of birth, gender, and nationality. 
• Contact Information: address, phone number, email address. This helps you contact the customer for updates, verifications, and offers.

• Identification Details: Government-issued ID numbers (e.g., Social Security Number, Passport Number), ID proof (upload sections for ID documents). This helps you confirm if the details provided in the personal and contact fields are correct. Also, if there are discrepancies, you can further review the customer profile to determine whether or not it was for malicious or illegal reasons.

• Financial Information: Bank account details, credit score, bank statements, and tax identification numbers. If you are offering finance services like mortgages, or loans, this information helps you understand you understand the risk you’re taking with the customer- does their history show a reliable repayment matter, can they repay the loan conveniently with their current income?

• Business Information (for corporate clients):  Company name, registration number, nature of business, authorized signatories.

Types of KYC Forms

There are different types of KYC forms for different use cases and industries. Here is a breakdown of different KYC form types and when you need them:

• Individual KYC Form: This is typically used for personal banking, investments, and other individual services. So, this is what you need if you operate a B2C company.
• Corporate KYC Form: This is designed for businesses and includes additional sections for company information and authorized personnel. So, unlike individual KYC Forms, the information collected will be about the business, its registration, and the kind of services they need, suitable for the B2B model.
• Simplified KYC Form: This is for low-risk customers or transactions with limited financial engagement.
• Enhanced KYC Form: This is for high-risk customers e.g. crossborder payments with strict AML laws. Unlike the regular KYC form, you will need additional layers of verification and documentation such as government IDs, facial recognition, financial statements, and sometimes even a guarantor.

Tips for Designing Your KYC Form

Here are some pointers to help you create an effective KYC Form:

• Clarity and Conciseness: Use simple, easy-to-understand language with clear instructions for each field. Also, only ask for information absolutely necessary for KYC purposes; there’s no need to overwhelm users with unnecessary details. If your KYC forms are too long, you will most likely experience a high drop-off rate during registration.
• Prioritize User Experience: When creating your KYC form, ensure it’s responsive and adapts across all devices. You can also include progress indicators to show users how far they are through the process; it shows the number of steps they need to go through and creates a sense of encouragement with every step achieved.  You should also add specific error messages for incorrect entries, guiding users for correction e.g. invalid email address, check and re-enter the correct address.
• Security and Compliance: Encrypt data collected, ensuring users’ privacy in line with the appropriate KYC and Data Protection regulations.
• Multilanguage support: If you offer services in more than one country, your KYC form should be multilingual so that all potential users have a good experience.
• Accessibility: You must make the form accessible for all users with disabilities through features like screen readers.

Step-by-Step Guide to Filling Out a KYC Form

As a customer, here are some tips to help you complete the KYC form: 

• Gather Necessary Documents: This includes government-issued ID (passport, driver’s license), proof of address (utility bill, bank statement), and additional documents as required (e.g., tax forms).
• Complete Personal and Contact Information: Enter full legal name, date of birth,  nationality,  residential address, current phone number, and a valid email address.
• Provide Identification Details: Enter ID number from your chosen government-issued document, Be prepared to upload or provide a copy of this ID.
• Submit Financial Information: Describe your source of funds e.g. business, gifts, salary, investments, etc, and provide an estimate of your annual income.
• Review and Confirm: look through all your details to confirm all the details are correct if they are submitted. Keep in mind that changing your information after KYC can be very difficult, so make sure to pay attention when reviewing your details.

 Free KYC Form Template

Completing a KYC process manually can be time-consuming and difficult but with an online KYC form template, you can quickly and easily gather the necessary information from your customers. This enables you to verify their identities and onboard them if their details do not violate any laws or require you to report them for illegal activities.

Steps to Create Your KYC Form

• Go to the KYC form template and click Use template

• Sign in or create a new account
• Edit your form questions to fit your specific KYC requirements
• Add logic to your questions to personalize each customer’s experience. So instead of filling nil and skipping multiple fields, they only fill relevant ones. For example, if a customer fills salary earner, the next question would be their role in the company, they won’t have to answer the same questions as someone who is running a business or self-employed.
• Customize your form’s design by changing its color, fonts, or theme.
• Preview the form to be sure it displays across different screens perfectly.
• Share the form with customers via QR code or embed it on your website or app. You can also add and share it directly with customers via email or physically in the office for account recovery purposes.

Conclusion

KYC processes enable you to verify customer identities, assess risks, and comply with regulations. However, the form’s sole focus shouldn’t be compliance alone- you should balance regulatory requirements with user experience.

Using the Formplus KYC form template helps you balance compliance and user-friendliness. The form is secure, it’s also easy to customize so you don’t have to worry about sacrificing functionality for aesthetics. We hope this guide makes creating your KYC forms easier and here’s the free KYC template to get you started.