Know Your Customer

Regulatory

Global

Enforced by multiple government agencies around the world with responsibility for combating money laundering and financial fraud.

Know Your Customer covers the activities of customer due diligence that financial institutions and other regulated companies must perform to identify their clients and ascertain relevant information pertinent to doing financial business with them. Additionally, it also covers the bank regulations governing those activities.

In the financial context, Know Your Customer describes the process by which a bank or financial institution checks the identity, background and other aspects of the source of wealth of potential and existing customers. KYC legislation and regulation require firms to obtain evidence of identity of a customer at take-on and to keep a record of that evidence for as long as there is a relationship with a customer. Legislation and regulation also require a firm to keep up to date its knowledge of a customer throughout the life of the relationship, so that changes in the customer's activity can be assessed and dealt with – all with the principal aim of preventing Money Laundering and Financial Crime. In the U.S., KYC is typically a policy and process implemented to conform to a customer identification program (CIP) mandated under the Bank Secrecy Act and USA PATRIOT Act. Know your customer policies are becoming increasingly important globally to prevent identity theft, financial fraud, money laundering and terrorist financing.

PWC Know Your Customer quick reference guide
IRS List of Approved KYC Rules by Country
KYC on Wikipedia