What is KYC?

Know Your Customer (KYC) refers to the process of identifying and verifying your customers.

The term is also used to refer to anti-money laundering regulations that govern banking activities.

KYC policy incorporates the following steps taken by financial institutions:

  • Establishing customer identity; collecting necessary identity documents from the customer.
  • Monitoring the transactions of the customer, understanding the nature of transactions.
  • Management of risk associated with the customer transactions.

KYC is a Centralised Risk Management Process. It involves establishing a centralised process for formulating and coordinating policies and procedures. It also involves making robust arrangements for the sharing of information. The policies formulated need to strictly adhere to the laws and regulations and help mitigate the risk. Banks, for instance, require KYC process to coordinate the risk management activities across all branches and the head office.

You can have a look at Instantor's KYC solution here.