Know Your Customer
From Open Risk Manual
Definition
Know Your Customer (KYC) is the process of a business verifying the identity and standing of its clients and the character of the business or transactions they generate. The term is also used to refer to the legal regulations which govern these activities
It is a mandatory banking regulation designed to protect the integrity of the financial system by reducing the likelihood of financial institutions becoming vehicles for money laundering, terrorist financing, and other unlawful activities. To mitigate risks, financial institutions perform KYC checks by obtaining sufficient information that can be used for developing a comprehensive profile of the customer, such as proof of address, photographic identification, or historical behavior.
