Knowing your customer builds a good relationship between the buyer and seller. With this, you can easily identify which one will be your top priority however it would also mean that you should check every detail about the person, this could also be used as a backed up data so when you need to trace the person, you know where to start. Millions are being earned from this business, and it is not easy to identify who earns it. but thru KYC they can have a way to identify them.
Yep, I definitely agree with you that when you know your customer,you can build a good relationship. Even it is really much more safer for you if you know your customer ,I find it convenient for me to know my customer. Around us, there are many people who are scammers, has black money and to speak frankly I am sure that nobody can know or identify whether they are cheated and even lost lots of asset.In anyway,its really necessary for us to know our customer.
Asides the good relationship, which we already know that is not the main essence of the KYC, the actual sense of it is just to fish out any misdealing that could look more like illegal which we all know it is normal anyway for anything that has to do with monetary policies in most countries, and since this is in play, I am sure most exchanges in these countries usually do not have a choice than to collect the data of each individual, irrespective of how they end up using it.