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:
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.