I am familiar with KYC from a banker's perspective (at least that of a close relative who was a bank manager).
KYC helped them by deny-listing abusive clients between branches, or by allowing the bank to develop heuristics for things like allowing customers to bypass cheque clearing times.
From an end-user perspective, I've had no hangups personally but I do share your grievances about yet-another-shoddy institution holding a photocopy of my ID. My bank truncates passwords when setting them, and when logging in, without telling the user. It boggles the mind.
KYC helped them by deny-listing abusive clients between branches, or by allowing the bank to develop heuristics for things like allowing customers to bypass cheque clearing times.
From an end-user perspective, I've had no hangups personally but I do share your grievances about yet-another-shoddy institution holding a photocopy of my ID. My bank truncates passwords when setting them, and when logging in, without telling the user. It boggles the mind.