Short answer
Know Your Customer (KYC) is the set of processes financial institutions use to verify a client's identity, understand their financial profile and assess risk before and during a relationship. It is required by anti-money-laundering rules and supports suitability and best-interest obligations.
Know Your Customer (KYC) explained
In the U.S., KYC includes the Customer Identification Program required under the Bank Secrecy Act as amended by the USA PATRIOT Act, customer due diligence and beneficial ownership requirements, sanctions screening, and ongoing monitoring with enhanced due diligence for higher-risk clients. Broker-dealers also have FINRA Rule 2090, which requires reasonable diligence to know essential facts about each customer.
Onboarding workflows in a CRM capture KYC data, documents and approvals, and trigger periodic reviews.
How Vantage Point helps: we build client onboarding and KYC review workflows in Financial Services Cloud with document capture and integrations to verification providers.
Frequently asked questions
What is the difference between KYC and AML?
KYC is the client identification and due diligence part of a firm's broader anti-money-laundering (AML) program, which also includes transaction monitoring and reporting.
How often should KYC be refreshed?
It depends on risk. Higher-risk clients are typically reviewed more often, and reviews are also triggered by significant changes in a client's circumstances.