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Researching A KYC Process For A B2C Fintech App

  • Writer: Priank Ravichandar
    Priank Ravichandar
  • Mar 10
  • 8 min read

Researching the requirements for a KYC (Know Your Customer) process for a Dutch B2C Fintech App.



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Context

Fintech platforms are required to complete a KYC (Know Your Customer) process as per government regulations. We want to introduce a basic KYC process for our application, and we need to understand the regulatory obligations and operational requirements. We want to compile a research report to guide the design of the new compliant KYC process.


Workflow

Tools: Perplexity, ChatGPT


Step 1: Identify Research Questions

Using ChatGPT, we can generate some initial research questions to investigate.

Prompt


I am a product manager for a B2C Fintech App that operates in the Netherlands. I want to design a KYC process for our customers as per the regulations. Can you create a list of research questions to investigate?

Step 2: Refine Research Questions

We can refine the output based on our specific requirements.


Refined Questions (using GPT 4o Output)

  1. What are the specific KYC obligations under Dutch and EU regulations?

  2. What are the penalties or consequences of non-compliance with KYC obligations?

  3. What information/documentation are we required to collect for KYC purposes?

  4. What specific documents are mandatory for Dutch customer identity verification?

  5. What would be the document hierarchy for a KYC process?

  6. How often must KYC information be updated or re-verified?

  7. What is the general KYC process for B2C fintech apps in the Netherlands?

  8. What would the end-to-end KYC process be for our application?

  9. What specific steps are fintech apps required to take during the KYC process?


Step 3: Optimizing The Research Prompt

We can optimize the initial prompt using ChatGPT to improve the quality of research output.

Initial Prompt


You are an expert prompt engineer. Can you help me refine this finalized prompt:

I am a product manager for a Dutch B2C Fintech App that mainly provides banking services. I want to design a standard KYC process for our customers, but I need to gather context on what the KYC process involves. Give me a detailed research report that covers the following topics :
1. What are the specific KYC obligations under Dutch and EU regulations?
2. What are the penalties or consequences of non-compliance with KYC obligations?
3. What information/documentation are we required to collect for KYC purposes?
4. What specific documents are mandatory for Dutch customer identity verification?
5. What would be the document hierarchy for a KYC process?
6. How often must KYC information be updated or re-verified?
7. What is the general KYC process for B2C fintech apps in the Netherlands?
8. What would the end-to-end KYC process be for our application?
9. What specific steps are fintech apps required to take during the KYC process?

Use your best judgment to identify any additional information that might be helpful outside these topics.

Refined Prompt (using GPT 4o Output)


I am a product manager for a Dutch B2C Fintech App that mainly provides banking services. I am designing a Know Your Customer (KYC) process and need a detailed research report to understand regulatory requirements, operational best practices, and typical customer verification workflows.

Please provide a structured research report that covers the following:
1. What are the specific KYC obligations under Dutch and EU regulations?
2. What are the penalties or consequences of non-compliance with KYC obligations?
3. What information/documentation are we required to collect for KYC purposes?
4. What specific documents are mandatory for Dutch customer identity verification?
5. What would be the document hierarchy for a KYC process?
6. How often must KYC information be updated or re-verified?
7. What is the general KYC process for B2C fintech apps in the Netherlands?
8. What would the end-to-end KYC process be for our application?
9. What specific steps are fintech apps required to take during the KYC process?

Finally, include any additional insights you find relevant. Use your best judgment. Use official Dutch/EU sources where possible and clearly cite them in the report.

Step 4: Research Basic KYC Requirements

Using a research tool like Perplexity AI, we can research the general KYC requirements for Dutch B2C Fintech apps.



Step 5: Review And Refine AI-Generated Research Report

We review the sources and restructure the report as per internal standards.


KYC Process For Dutch B2C Fintech Apps


Stakeholder FAQs

1. What regulations govern KYC for Dutch FinTechs?

The Anti-Money Laundering and Counter-Terrorist Financing Act (Wwft) is the main Dutch law implementing EU AML Directives. The EU’s Single Rulebook (Regulation (EU) 2024/1624) harmonizes stricter AML/KYC obligations across EU Member States, requiring customer due diligence (CDD), beneficial ownership checks, and ongoing risk assessments.


2. What penalties could we face if we don’t comply with KYC rules?

Non-compliance may result in:

  • Administrative penalties by the Dutch National Bank (DNB) with recent fines ranging from several hundred thousand to over €1 million.

  • Reputational damage and potential business restrictions.

  • Criminal liability: Intentional money laundering can mean up to six years in prison or fines up to €87,000 per instance under Dutch law.

  • For ongoing failures, fines may be raised depending on the severity of breaches.

 

3. What information do we need to collect from customers?

  • Full name

  • Date and place of birth

  • Nationality

  • Residential address

  • Valid identity document details (passport, national ID, or driving license)

  • Proof of address (utility bill, bank statement, municipal certificate, or official correspondence—dated within the last 3 months)

  • Additional background documentation is needed for high-risk profiles.

 

4. Which identity documents are acceptable for Dutch customers?

  • Dutch national ID card

  • Dutch passport

  • Dutch driving licence

  • EU/EEA passport/ID (for non-Dutch EU customers)

  • Dutch residence permit (for non-EU residents)

 

5. What’s the required order or hierarchy for KYC documents?

Step

Document

Identity verification

Passport, National ID, Driving License

Address verification

Utility bill/bank statement/tax letter

Risk assessment

Sanctions/PEP/Adverse media screening

Enhanced Due Diligence

Notarized documents, professional reference

Ongoing monitoring

Update requests, transaction monitoring

 

6. How often do we need to update or re-verify KYC data?

  • At initial onboarding

  • On customer data changes (e.g., address, surname)

  • For standard risk: review every 3–5 years; for high risk: annually or more frequently.

  • When suspicious activity arises or transaction patterns change

 

7. What is the typical KYC process for Dutch B2C fintech apps?

  • Collect info at sign-up

  • Digital ID verification (NFC/eID, liveness, biometrics)

  • Capture document images and metadata (time/location)

  • Conduct AML checks (sanctions, PEP, adverse media)

  • Monitor transactions/relationships using tech-enabled risk triggers.

 

8. What steps must a fintech app take in the KYC process?

  • Implement robust customer identification.

  • Use secure automated ID/address verification (NFC/biometric)

  • Assign and update risk profiles dynamically.

  • Screen customers/transactions against sanctions lists

  • Retain audit trails of documentation and verification decisions.

  • Report suspicious activity to FIU-NL.

  • Reverify KYC at set intervals or if risk triggers arise

 

Final Research Report


1. KYC Obligations under Dutch and EU Regulations

  • Dutch KYC is governed mainly by the Anti-Money Laundering and Counter-Terrorist Financing Act (Wwft), which implements EU AML Directives (1,2,3).

  • The EU “Single Rulebook” (Regulation (EU) 2024/1624) harmonizes stricter AML/KYC obligations across all Member States, mandating robust customer due diligence (CDD), beneficial ownership checks, and ongoing risk assessment (4,5).

  • Obliged entities, such as banks and fintechs, must:

    • Identify and verify all customers’ identities using reliable, independent sources.

    • Monitor business relationships and transactions on an ongoing basis.

    • Undertake enhanced due diligence (EDD) for high-risk customers (e.g., PEPs).

    • Screen clients and transactions against sanctions lists (3).

    • Report suspicious transactions to the Financial Intelligence Unit (FIU-NL) (3,4).

 

2. Penalties or Consequences of Non-Compliance

  • Non-compliance with KYC/AML can result in:

    • Substantial administrative penalties imposed by the Dutch National Bank (DNB)—recent fines range from several hundred thousand to over €1 million (6,7).

    • Reputational damage and potential business restrictions.

    • Criminal liability: Intentional money laundering carries up to six years’ imprisonment or fines up to €87,000 per instance under the Dutch Criminal Code (8).

    • For ongoing failures, fines may be raised or adjusted depending on the severity of breaches (6,7).

 

3. Required Information/Documentation for KYC

For natural persons (B2C), you must collect and record the following:

  • Full name

  • Date and place of birth

  • Nationality

  • Residential address

  • Valid identity document details (passport, national ID, or driving license)

  • Proof of address (recent utility bill, bank statement, municipal certificate, or official correspondence—typically dated within the last 3 months) (9,1,10).

  • In some cases, a professionally drafted reference or further background documentation is required for higher-risk profiles (10).


4. Mandatory Identity Documents for Dutch Customer Verification

  • Acceptable documents for identity are:

    • Dutch national ID card

    • Dutch passport

    • Dutch driving licence

    • EU/EEA passport/ID (for non-Dutch EU customers)

    • Dutch residence permit (for non-EU residents) (9,1,10).

  • Documents should be original or verified electronic copies; for added security, many firms require notarization for in-person proof or a trusted eID for digital verification (10,9,11).

  • NFC chip scanning of ID documents is a standard onboarding practice for Dutch fintechs, ensuring authenticity and liveness (11).

 

5. Document Hierarchy for the KYC Process

A typical KYC document hierarchy, in order of importance:

#

Step

Document

1

Identity verification

Passport, National ID, Driving Licence (1)

2

Address verification

Utility bill/bank statement/tax letter (10)

3

Risk assessment

Sanctions/PEP/Adverse media screening

4

Enhanced Due Diligence (EDD)

Notarized documents, professional reference (if high-risk) (10)

5

Ongoing monitoring

Update requests, transaction monitoring

 

Note:

  1. The document must display all personal data, including the citizen service number (BSN).

  2. Additional proof of address is required IF the primary ID does not show the address or the address cannot be verified.

 

6. Frequency of KYC Updates/Re-verification

  • Initial onboarding: KYC must be completed before account activation.

  • Ongoing: Customer data should be renewed if there are changes (e.g., address, surname)9.

  • Periodic review: For standard risk, KYC review should occur every 3–5 years; for high-risk customers, annually or more frequently as determined by your risk policy (11,9).

  • Trigger events: Re-verification is required when there is a suspicion of money laundering, significant transaction pattern changes, or updates in regulatory watchlists (4).

 

7. General KYC Process for B2C Fintech Apps in the Netherlands

  • Collect user information at sign-up.

  • Digitally verify identity: Use eID or NFC-based scanning, liveness checks, biometrics, and cross-validate data with government databases (11).

  • Capture/document images and metadata (including time, location, where possible).

  • Conduct AML checks (sanctions, PEP lists, adverse media) (3).

  • Ongoing monitoring and transaction pattern analysis with tech-enabled risk triggers (11).

 

8. End-to-End KYC Workflow for Your App

  1. Customer Registration: Collect essential user data (identity, address, contact).

  2. Document Upload 

    1. Identification: Customer uploads national ID, passport, or driving license.

    2. Proof of Address: ONLY if ID does not suffice

  3. Digital Verification: 

    1. Automated/manual authenticity checks

    2. Liveness/selfie check for remote verification.

    3. Validate data against official registries (11).

  4. Risk Assessment: 

    1. Run real-time checks for sanctions, adverse media, and PEPs (3).

    2. Assign user to risk category (standard/PEP/high risk).

  5. Approval/Decision: Systematic and/or manual review

    1. Approve, reject, or request additional documents as needed.

    2. If standard, proceed; if high risk, perform EDD (e.g., request notarized doc, reference).

  6. Account Activation: Grant access on successful clearance.

  7. Monitoring: Automate triggers for unusual activity or customer detail changes, prompting update/re-KYC as required.

  8. Ongoing Review: Scheduled revalidation, update customer profiles as needed (11,12).


Note: Specific Steps Required for Fintech Apps

  • Implement a robust customer identification program (CIP).

  • Use secure, automated ID and address verification tools.

  • Assign and document risk profiles—update dynamically.

  • Screen all customers and transactions against updated EU and global sanctions lists.

  • Retain audit trails of all KYC documentation, verification decisions, and validations.

  • Create procedures for reporting suspicious or unusual activity to authorities (STRs to FIU-NL) (3,4).

  • Reverify/refresh KYC at regular intervals and/or upon risk triggers (9,11).


References

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