The full form of KYC is Know Your Customer and sometimes also Know Your Client.
Understanding KYC
KYC, or Know Your Customer, is a mandatory process used to verify a client's identity. This verification is performed when a client opens an account and periodically thereafter. The purpose is to prevent fraud, money laundering, and other illicit activities.
Here's a breakdown of what KYC entails:
- Identifying the Customer: Gathering essential information about the client.
- Verifying Identity: Confirming the information provided by the client using reliable sources.
- Ongoing Monitoring: Continuously monitoring transactions and client behavior for any suspicious activity.
KYC processes are crucial in various industries, including:
- Banking
- Finance
- Insurance
By adhering to KYC guidelines, businesses can ensure they are dealing with legitimate customers and contributing to a safer financial environment.
