KYC

Know Your Customer (KYC) is the umbrella term for the controls a financial institution uses to confirm who its customers are and to understand the risk they present. In the US, KYC is anchored by the Customer Identification Program (CIP) rule and Customer Due Diligence (CDD) requirements under the BSA.

A KYC program typically collects identifying information (name, date of birth, address, government ID number), verifies it against documentary or non-documentary sources, screens the customer against sanctions and watchlists, and assigns a risk rating that drives the level of ongoing monitoring.

Strong KYC is risk-based: higher-risk customers (for example, those in higher-risk jurisdictions or with complex ownership) receive enhanced due diligence, while lower-risk customers follow a streamlined path.