Sure, but don't for one second pretend its ever for the convenience of the customer or any of that sort of nonsense. It's very clearly for your bottom line and for the government's ability to track financial movement.
Most customers find it convenient that the exchange they use doesn't abruptly get all its (and by extension, its clients') assets seized by government officials for not complying with financial regulations.
Obviously security will always come at a convenience cost, and if by "my bottom line" you mean "not losing money to fraud" then yes, duh.