KEY FACT
Oversight can cause reputational damage that lasts for decades
REGTECH
F R O M P A P E R D I G I T A L I N T E
US $ 9.2bn
KYC market rising from US $ 9.2bn in 2024 with significant growth expected
KEY FACT
Oversight can cause reputational damage that lasts for decades
Modern KYC requirements stem from the Bank Secrecy Act of 1970, a landmark US legislation that first required financial institutions to help combat money laundering.
Initially, customer verification meant face-to-face meetings where bank managers manually reviewed physical documents – a laborious process that worked in an era of local banking relationships.
The digital revolution changed everything. As banking moved online, so did fraud. The September 11 attacks prompted the 2001 PATRIOT Act, which mandated that all financial institutions establish formal customer identification programmes. Suddenly, knowing your customer wasn’ t just good practice – it was a legal obligation.
Yet even as verification became digital, the review model remained stuck in the past. Annual or multiyear check-ups made sense when customer profiles rarely changed. Today’ s dynamic business environment renders such static approaches dangerously outdated.
72 August 2025