What is know your customer (KYC)?
KYC is the broader process of verifying and understanding a customer's identity, financial activities, and risk profile. It encompasses CDD, EDD, and ongoing monitoring. KYC is a fundamental requirement under AML regulations and applies to all regulated businesses including non-financial institutions.
KYC for non-financial institutions
While KYC was historically associated with banks, the FATF Recommendations extend equivalent obligations to DNFBPs. Real estate agents, lawyers, and accountants must all verify their customers' identities and screen them against sanctions lists before establishing business relationships.
Related terms