Identity verification guide

Every customer opening a trading account with Scandinavian Capital Markets must complete our know-your-customer (KYC) check. This procedure is like opening a bank account at your local branch, except it’s performed online.

Since our company operates internationally, our requirements might differ from those of other financial services you use. Furthermore, we use an automated identity verification system, a standard procedure in today’s digital financial services industry, which can often frustrate some customers. Finding documents, taking photos, and taking selfies can feel like a menial task. Retrying verification or rejection due to avoidable minor errors or misunderstanding of the requirements increases frustration. 

However, despite these challenges, the importance of this process cannot be overstated. It serves as a critical barrier against identity theft, fraud, and other financial crimes, ensuring the safety and security of your personal and financial information in the digital realm. 

Therefore, this article highlights the requirements, common missteps and nuances of performing automated identity verification with Scandinavian Capital Markets.

Overview

To open a trading account with Scandinavian Capital Markets, you need:

1. A valid government-issued photographic identity document, such as a passport, driver’s license, identity card or residence permit.

2. A current proof of residence document from an independent and reliable source in your country of residence. For example, a bank statement, tax document or utility bill for a service provided at a fixed address.

3. Provide a selfie using your webcam or mobile phone camera.

We may also request additional documentation on a case-by-case basis. 

Introduction

Scandinavian Capital Markets is an online trading broker. We serve customers internationally and rarely meet face-to-face. The digital financial sector, while offering unprecedented convenience and accessibility, also opens up new avenues for illicit activities. 

Money laundering, a significant threat to the economic and social fabric, has found new disguises in this digital era. It’s a world where faceless transactions can, without diligent oversight, become conduits for the cleansing of tainted money, financing of terrorism, and erosion of the financial system’s integrity.

Regulators worldwide have responded with a robust framework of KYC and anti-money laundering (AML) directives, designed not merely as bureaucratic hurdles but as essential tools to combat these invisible threats. These regulations mandate financial institutions to implement comprehensive identity verification processes, ensuring that each customer’s identity is thoroughly checked and authenticated.

Identity verification

Like any financial institution, we use government-issued photo identification, such as passports, national IDs or driver’s licences, to verify the identity of our customers. 

This method relies on the high level of security and legitimacy associated with these documents, which are issued by governmental authorities and contain several layers of security features. 

When a user submits a photo ID, the verification system processes the document for its validity, checking features like holograms, watermarks, and other security elements that are difficult to manipulate or forge physically or digitally.

The main issue experienced when customers upload their identity documents is scanned documents. Unfortunately, our automated system flags scanned documents as being digitally manipulated. The best way to share an identity document is to take a photograph using your webcam or mobile phone camera.

Liveness detection

As we perform KYC remotely, we must be sure the owner of the documents is the person applying for the account. Therefore, we use facial recognition technology to match the photo on the ID with a live recording provided by the user, ensuring that the person presenting the document is its rightful owner. Liveness detection eliminates the risk of identity theft.

Tips for problem-free liveness detection:

• Remove items obstructing your face, such as glasses or headphones.
• Ensure the room is well-lit. 

Address verification

Proof of address is a document that verifies a person’s current residential address. We only accept letters, statements and other documents issued in the past 90 days. Obtaining proof of address is the most problematic part of our KYC process due to the variety of documents allowed and the legitimate lack of suitable documentation due to cohabitation.

You can submit documents in any language from any country. We accept the following documents:

• Bank/credit card statement;
• Letter from your local municipality or tax bill;
• Utility bill (electricity, water or gas);
• Fixed line internet or telephone bill (not mobile phone bill)
• Rental contract;

Tips for problem-free address verification:

• Do not provide mobile phone bills; they are not a service provided at a fixed address;
• Do not upload screenshots; provide the PDF of the digital document or photograph or the physical document;
• Make sure the document you are providing was issued within 90 days;
• Driving licenses cannot be used for address verification, even if issued in the past 90 days;
• Sometimes, the automated system confuses telephone or internet bills with mobile phone bills;
• Do not edit the documents, for example, to adjust dates or hide account balances;
• Ensure the entire document is visible, including the edges; do not just take a photo of the address;

Ongoing due diligence 

We are required to monitor existing customer relationships. This practice is essential for managing risks and ensuring compliance with AML and counter-terrorism financing (CTF) regulations. Therefore, we may contact you in the future to update your information.

For example, some documents like passports and driver’s licenses have an expiration date. When your documents expire, we will contact you for updated documents. We will also contact you periodically to verify your current address.

Frequently asked questions

How long does it take to perform identity verification?

The process can take a few minutes if all your documents are ready before starting. 

How long does it take to open a live account?

We aim to review all new applications within 24 hours. However, it’s often much faster in practice.

Do I need to translate documents?

No. You do not need to translate documents. Our automated system handles translations, which are reviewed by our team.

What if I do not have a proof of address?

We accept many forms of proof of address, and you likely have access to an acceptable document. Please contact us with any concerns.