The term Know Your Customer (KYC) is a customer identification process where a customer's identity, financial status and address are verified. The term is also used to refer to anti-money laundering regulations (AML) that govern banking activities. Knowing your customer – verifying identity, ensuring they're real, confirming they're not on any prohibited lists and assessing their risk factors — makes it easier to keep money laundering, terrorist financing and more run-of-the-mill fraud schemes at bay. Most KYC procedures now run online with optimised online KYC registration processes.
KYC policy incorporates the following steps taken by financial institutions:
By first verifying customers' identities and intentions and then understanding their transaction patterns, banks can accurately pinpoint suspicious activities. From there, the bank quantifies how much of a risk its clients appear to be and how likely they are to become involved in corrupt or illegal activity. KYC is an essential part of any financial service providers business. To deliver online financial services, companies need to have methods for remote identification to be aligned with KYC standards. To make the KYC process as uncomplicated as possible simply makes sense.