They are needed if they want to operate legally. The KYC and AML policies depends on the country where the exchange is operating from. They have to do KYC if they wish to continue their business. The information are mainly collected to inform legal authorities if someone makes a huge transaction or is kind of suspicious. The information is also used by them to track crypto users and tax them. The exchange would get into trouble if they fail to report someone who committed a crime.
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Swapzone has the notification on KYC frequency for the platforms we work with along with the tips of passing KYC/AML without hassle. Besides, you can always contact the provider’s customer support for more details on passing the check.
https://swapzone.io/learn/how-to-exchange-large-amounts/Kinda looks like you are advertising for your platform. Make proper announcement thread.