Know your customer (KYC)

It’s a set of standards and guidelines that require financial institutions to verify the identity of their customers. KYC is a form of risk assessment, and its main goal is to help prevent financial crimes (fraud, money laundering, various forms of illicit financing). KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant and are actually who they claim to be. KYC is a form of due diligence, and it requires financial institutions to collect certain documents that can verify a customer’s identity, source of income, occupation, and other information that may be considered relevant. KYC helps financial institutions determine a customer’s risk level, after which it can decide on the most prudent course of action.

Sources:

Know your Customer (KYC) Definition | Britannica Money. (n.d.). Retrieved from https://www.britannica.com/money/know-your-customer-kyc

"Know Your Customer" Standards. (01.08.2012). Retrieved from https://archive.ph/20120801052416/http://www.directorateofenforcement.gov.in/KYC11.html