Know Your Customer/Clients To Ensure Business Growth

The term KYC (Know Your Customer) was first coined in the United States. The importance of KYC today is very much well known but still the MSME/Business entities are not giving relevant importance to KYC. The importance of why having KYC in your business system was aptly said by Dr Subir Gokarn, Deputy Governor, Reserve Bank of India at Bancon 2011 “If you really know your customer, you will be able to grow with your customers”. A Business should not only be concerned with making Profits but shall also attempt to know who it is dealing with. This means identifying and verifying the customer. In all successful business entities having KYC as part of business system has become a business philosophy and is used by most companies. KYC is one of the methods of validating the identity of a business and executives that are running the business and is hence often seen as a catalyst for business growth. Knowing your customer, no matter what industry and field you are in, is the absolutely essential first step to sustainable business growth.

KYC has its importance from Business Growth aspect as well as Legal aspect. Having KYC in proper manner ensures reducing costs in Litigation and this indirectly leads to business growth.

From legal point of view, having a KYC shall be the part of all Business System to have proper documentary proof so that the legal case and recovery process is not suffered.

From legal point of view, having a KYC shall be the part of all Business System to have proper documentary proof so that the legal case and recovery process is not suffered.

Taking the current business practice, following points shall be included in KYC (may differ from business to business but mostly is covered):

The reason for having the above KYC documents so that one is assured of trying the best to recover the money from their sale of property/freezing of bank accounts as most of the times, even after order/decree, recovery is not made for no details to trace Opposite Default Party them or their property and hence better to have before the relationship starts

Having KYC in your business system supports Business growth for following reasons:

• KYC helps to understand customers’ profile & needs and thereby ensuring the business entities to know upfront about its customer needs
• Ensuring that your customer is a valid and genuine customer and the business transaction is not a sham transaction and thereby saves the future litigation and thereby reducing the costs and thereby business growth
• Having the details of your customer gives the Business entities the way to tackle with them and thereby it helps in building the trust

There is no doubt that any business entities, who believes providing best Services, After Sales Services and Customer Satisfaction, will always remain the market irrespective of any technical changes and or competitors.

Knowing your customer, no matter what industry and field you are in, is the absolutely essential first step to sustainable business growth.