Why ‘know your customer’ provisions are essential in the telecommunications industry

By Brendan Crawford August 7, 2023

In a world where digital adoption is unfolding at a furious pace and consumers are shifting to online channels in unprecedented numbers, there is a question every telco should be asking itself – ‘how well do I know my customers?’.

Digital transformation has been so rapid in the telecommunications industry that traditional telcos (telecoms operators) are under increasing pressure to become techcos (technology companies). That brings with it a heightened risk of falling victim to fraud and losses resulting from illegal funds and transactions. Know your customer (KYC) provisions1 are not only critical for assessing customer risk but are a legal requirement to comply with laws that can result in fines, sanctions and reputational damage for companies that help enable money laundering or other illegal activity.

In the contact centre space, KYC regulations require companies to accurately confirm they are speaking with the person a caller claims to be. A high level of due diligence is a must. It has been revolutionised in recent years by the development of Automated KYC Verification, which has created faster and more definitive confirmation without agent involvement.

Given the ever-changing landscape, this article will explore KYC provisions, government regulations and mandates, and the use of voice verification to check customer identification.

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KYC and the law

Given the financial cost of identity crime, it is little wonder governments are heavily committed to Know Your Customer legislation. According to the Australian Institute of Criminology2 (AIC), the annual economic impact of identity crime exceeds $2 billion, and one in four Australians have been a victim at some point in their lives. From its role in money laundering and tax evasion to protecting the true identities of organised crime members, it is easy to see why the Australian Criminal Intelligence Commission rates identity crime as a key threat to society.3

As the government agency responsible for detecting, deterring and disrupting criminal abuse of the financial system, the Australian Transaction Reports and Analysis Centre (AUSTRAC)4 demands that all reporting entities must apply customer identification procedures to all customers, including collecting and verifying information before providing any designated services to them.

Minimum requirements include verifying their full name, as well as either their date of birth or residential address. It is a case of checking an individual customer’s identity to be satisfied they are who they claim to be or, when the customer is not an individual, that they represent a real entity (ie: business or organisation that actually exists) and the details of its beneficial owners are known.

In addition to knowledge-based authentication, high-risk transactions such as sim swaps need multi-factor authentication to reduce the risk of identity fraud. Voice biometrics is an excellent way for telcos to fulfill this obligation and ensure that customers can tick three authentication boxes - something they know (eg: password, knowledge-based), something they have (eg: an SMS code) and something they are (eg: voice biometrics).

By ‘knowing your customer’ and being familiar with typical transactions and interactions, institutions such as banks and the contact centres that support them can be aware of any unusual or suspicious activity and thus reduce the risk of being exploited for money laundering or terrorism financing purposes.

KYC and voice verification

Thrown into this mix is Automated KYC Verification, a rising trend in telecommunications. While the traditional process of asking someone to prove their identity was asking for their date of birth or address, any contact centre agent will tell you that is a highly manual and often unsecure process that takes up both their time and that of their customers. Automated KYC Verification software, such as that featured in cloud-based call routing plug-in Oration, is a much faster and definitive confirmation, especially when configured to use voice verification that matches callers with their stored voiceprints.

A ground-breaking technology, voice verification for contact centres – aka voice biometrics - enables a customer’s voiceprint to be used as the key to their account and works on the premise that every person’s voice is unique. Simply saying their account or phone number is all that is needed to confirm one’s identity and businesses can even create a database of ‘known or suspected fraudster’ voiceprints to recognise people who have previously carried out fraudulent transactions.

With organisations such as the Australian Tax Office promoting voice authentication5 as a secure way to confirm identity, it is clear customer identification checks linked to voice biometrics are meeting the high standards required in the modern security-conscious world.


While there is a current push for telcos (telecoms operators) to become modern techcos (technology companies), they will also need to keep evolving to meet the market. This includes delivering faster and more secure service to customers, all while meeting legislative requirements, and it is reassuring to know that tools such as Oration are doing just that when it comes to Automated KYC Verification Software.

Customer experience (CX) is increasingly considered one of the key drivers for organisations wanting to maintain a competitive advantage. Discover how implementing artificial intelligence and analytics can empower CX agents and, in turn, harness the power of satisfied customers.

1 https://www.austrac.gov.au/business/how-comply-and-report-guidance-and-resources/customer-identification-and-verification/customer-identification-know-your-customer-kyc
2 https://www.homeaffairs.gov.au/about-us/our-portfolios/criminal-justice/cybercrime-identity-security/identity-crime
3 https://www.homeaffairs.gov.au/about-us/our-portfolios/criminal-justice/cybercrime-identity-security/identity-crime
4 https://www.austrac.gov.au/
5 https://www.ato.gov.au/general/online-services/voice-authentication/

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