KYC (Know Your Customer)

KYC, or Know Your Customer, is a crucial process that financial institutions follow to verify the identity of their clients, like a wise king seeking to know his subjects and protect his realm from unknown threats. By adhering to KYC guidelines, institutions can prevent fraud, money laundering, and other financial crimes, ensuring the security and integrity of the financial system.

Example

When a customer opens a new account or requests a loan, banks and other financial institutions must adhere to KYC procedures to verify the customer's identity and assess their risk profile. This may involve collecting personal information, such as name, address, date of birth, and identification documents, as well as assessing the customer's financial history and the intended purpose of their transactions. By implementing KYC processes, financial institutions can better identify potentially high-risk customers, mitigate fraud risks, and comply with regulatory requirements aimed at preventing financial crimes.