A person wants to open a new bank account, so they use a bank’s online user portal to submit an application. To do so, they have to provide identification documents, such as their ID and/or passport. They also choose the video KYC option to verify their identity by jumping on a video call with a compliance representative and holding up their ID next to their face.

After their identity has been verified, the bank starts running different background check to see whether this person is at a higher risk of taking part in financial crimes. Specifically, they check different PEP, sanction and criminal lists to see whether this person is present on any of them.

Having verified that the person is not present on any watchlists and that their financial health raises no red flags, the bank assigns them a low-to-medium risk profile. Their account is approved but the bank keeps monitoring their activities for any signs of financial crime and reviews their information once every one or two years to stay compliant with AML/CFT regulations.