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Know your customer

11 months ago
admin5276
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In many countries it is now a requirement to demonstrate that you “know your customer”. Some people now talk about the need to “know your business” (KYB) and use the phrase “know your customer” (KYC) to refer to individuals.

Knowing your customer is simply undertaking basic due diligence to check that they are who they say they are.

In this factsheet, however, we follow the general use if the phrase without differentiating between businesses and individuals since both are customers. KYC is intended to make it harder for banks to be used by criminals who are seeking to launder money but is used by others to avoid corruption and bribery as well. Regardless of the motive, it is important that all businesses know their customer: this requires that you verify the identity of your clients or customers preferably before, but otherwise during, the time you do business with them. KYC allows businesses to protect themselves through being able to show that they are doing business legally and with legitimate organisations.