KYC & Compliance Management Module

The KYC & Compliance module (/kyc) enforces regulatory Anti-Money Laundering (AML) standards, Customer Due Diligence (CDD), Enhanced Due Diligence (EDD), and Politically Exposed Person (PEP) screening. It governs customer verification tiers, authenticates identity documentation, monitors expiring permits, and enforces the institutional blacklist.

1. Key Definitions & Concepts

2. Tiered Customer Verification Framework

BiiTrust operates a 3-tier KYC model designed to promote financial inclusion while strictly safeguarding institutional capital:

3. The Compliance Verification Rail (/kyc/verify/page.js)

When a loan officer registers a client or requests a tier upgrade, the dossier lands in the Compliance Queue (/kyc). The Compliance Officer conducts verification using a 3-step rail:

┌─────────────────────────────────────────────────────────────────────────────────────────────────┐
│ KYC Verification Rail                                                Step 2 of 3: Documents     │
├─────────────────────────────────────────────────────────────────────────────────────────────────┤
│ (1) Facts ──────────────────► (2) Documents ────────────────────────► (3) Decision              │
│ [ Verified Profile Data ]     [ Scans & OCR Inspection ]              [ Approve / Reject ]      │
├─────────────────────────────────────────────────────────────────────────────────────────────────┤
│ Customer: Mary Wanjiku | National ID: 28910482 | DOB: 14 May 1988 | Tier Requested: Standard    │
├─────────────────────────────────────────────────────────────────────────────────────────────────┤
│ Document Viewer:                                                                                │
│ [ National ID (Front) ]  [ National ID (Back) ]  [ Portrait Photo ]  [ M-Pesa 6-Mo Statement ] │
│ ┌──────────────────────────────────────┐  ┌───────────────────────────────────────────────────┐ │
│ │                                      │  │ Automated Verification Signals:                   │ │
│ │  [ Scanned National ID Card Image ]  │  │ • OCR Match Score: 98.4% (Name & ID match)        │ │
│ │  High-resolution zoom enabled        │  │ • Document Quality: Crisp, corners visible ✓      │ │
│ │                                      │  │ • Blacklist Search: 0 hits (Clean ✓)              │ │
│ └──────────────────────────────────────┘  └───────────────────────────────────────────────────┘ │
├─────────────────────────────────────────────────────────────────────────────────────────────────┤
│ [ Back to Facts ]                                                         [ Continue to Decision ]│
└─────────────────────────────────────────────────────────────────────────────────────────────────┘

Step-by-Step Verification Actions:

1. Step 1 — Facts:
   • Inspect declared full legal name, date of birth, gender, marital status, and national ID number.
   • Verify that the declared phone number matches the M-Pesa registered subscriber name.
2. Step 2 — Documents:
   • Examine the front and back of the National ID card: inspect edge sharpness, holographic elements, and date formatting.
   • Compare the customer’s portrait photograph against the government ID card photo.
   • Review utility bills or local chief letters for physical residence verification.
3. Step 3 — Decision:
   • Verify (Approve): Unlocks the requested KYC tier and allows loan origination up to that tier’s limit.
   • Return for Resubmission: Officer must recapture blurry photos or collect missing bills.
   • Reject & Blacklist: Flagged for fraud or forged documents; automatically transfers the individual to the Institutional Blacklist.

4. Institutional Blacklist Administration (/blacklist)

The Institutional Blacklist is an immutable shield against bad actors, fraudsters, and chronic defaulters:

Adding an Entity to the Blacklist:

1. Open Blacklist $\to$ Click Add Entry (/blacklist/new).
2. Enter the target’s National ID, passport number, full legal names, alias, and phone number.
3. Select the Violation Reason Category:
   • Identity Forgery / Impersonation
   • Forged Collateral Documents (Logbook / Title Deed)
   • Willful Fraud / Non-Existent Business
   • Chronic Unremedied Default with Flight
4. Enter detailed factual notes and attach police abstract or forensic report.
5. Click Save Blacklist Record.

Hard System Enforcement:

• Registration Barrier: The registration screen immediately errors with a red blocking modal if an officer attempts to enter a blacklisted National ID or phone number.
• Application Gate: If an existing borrower or guarantor is added to the blacklist, all open applications are immediately frozen.
• Lifting Protocol (/blacklist/:hex/lift): Only an Executive Director or Board Audit Committee member can lift a blacklist entry. Requires uploading formal committee resolution minutes and recording the authorized officer’s cryptographic token.

5. Expiring Documents Queue (/documents/expiring)

Identification, trade permits, and collateral insurances expire over time:

• The background cron job scans all active records nightly.
• Any document with an expiry date within the next 30 days appears on /documents/expiring.
• The system generates automatic dashboard reminders for the assigned loan officer:
  • “Action Required: Comprehensive insurance for vehicle KDB 489X expires in 18 days. Contact borrower to provide renewal certificate.”
• If an essential document expires without renewal, new disbursements for that client are automatically blocked until valid paperwork is uploaded.