Traditional Know Your Customer (KYC) documentation requirements—such as utility bills, tax certificates, and employment contracts—frequently lock low-income and informal workers out of the formal financial system. Central banks solve this barrier by implementing Tiered KYC Architectures. [1, 2]
The Multi-Tier Onboarding Framework
[Tier 1 Account: Low Limits] ---> Simple name and basic ID log; automated system verification
  |- [Tier 2 Account: Mid Limits] --> Requires verified face-to-face agent or digital ID upload
       |- [Tier 3 Full Bank Account] -> Full documentation check; unrestricted transaction access

By allowing consumers to open a basic Tier 1 account using simple identity verification, regulators can lower access barriers for unbanked populations while setting low transaction caps to prevent financial crime or systemic money laundering abuses.
 
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