What is Know Your Customer (KYC)?

Know Your Customer is the process companies undertake to verify that a customer is actually who they say they are. KYC processes can be carried out in-person or remotely online (so-called electronic Know Your Customer or eKYC).

KYC is an important tool so that companies know who they are working with and don’t enter commercial relationships with anyone involved in financial crime. While KYC applies across all industries and affects any type of business that onboards a user as a client, it is particularly important in industries such as financial services, insurance, real estate and investments since the risk of fraud, money laundering, terrorism financing, corruption and other financial crime is relatively high.

In recent years the focus has been on the latter, since optimising KYC processes through the use of digital technology (such as those which use open banking) is faster, cheaper and has security advantages that make the process smoother for all parties involved.