KYC (Know Your Customer)

KYC, or Know Your Customer, is the process financial institutions use to verify a customer's identity and assess risk. It helps prevent fraud, money laundering, and other financial crimes, and supports the security and integrity of the financial system.

Example

When a customer opens a new account or applies for a loan, banks and other financial institutions must follow KYC procedures to verify identity and assess risk. This can include collecting personal information such as name, address, date of birth, and identification documents, along with reviewing financial history and the purpose of the customer's transactions. By applying KYC processes, financial institutions can identify higher-risk customers, reduce fraud risk, and comply with regulatory requirements designed to prevent financial crime.