Do you know what does KYC mean and basic rules of this process? This article explains the concept of the term KYC, the main processes and key positions.
Know Your Customer is a necessary process of identification and confirmation of the client’s identity when opening an account. It is a systematic approach that includes several key steps. The first step is to fill out a detailed form and provide personal details. The second step is to verify identification, contact information, and employment history. The third step is an assessment of the client and risks: a check of reputation, participation in illegal activities, financial stability.
Business structures want to deal with reliable customers who comply with financial laws. Financial institutions must ensure that their customers are real people with verified credentials. The KYC system is fundamental to improving due diligence and preventing issues such as money laundering or terrorist financing.
Documents For KYC Customers
Verification for customers is based on documents, which customers must provide to confirm their identity and place of residence. KYC documents play a key role in Verification, which includes the Customer Identification Program, Customer Due Diligence and Enhanced Due Diligence. For beginners in the area of KYC need to follow some steps:
- Legal requirements. This will help understand what documents and information need to be collected as part of the process.
- Studying Internal Control Procedures. Knowing about procedures and policies is a step towards correct compliance.
- Collection and verification of documents. Learn how to collect and verify the necessary documents. Please note that the verification requires identity documents and only true information.
- The purpose of the account. In addition to checking documents and personal information, financial institutions may look in detail at the reason for opening the account. If the person aims to launder money, then the operation will be lost.
- If the client is a legal entity, the following is required for verification: name of the legal entity, company number or registration number, address of the registered office, address of the main office (if available).

Video What is KYC
Before the verification process of KYS it is important to know rules about this system. Watch the video to learn why KYC is required, the main tools, and how to get KYS.
You can also read about pros and cons of using Payoneer on our portal.
Conclusion
KYC is a tool that allows companies and financial institutions to identify and verify their customers in order to prevent fraud, money laundering and terrorist financing. This process helps to ensure security and trust in transactions between customers and companies, and to comply with legal requirements. An important component of KYC is the collection and verification of information about customers, their identity and source of funding.
FAQs about KYC
Yes, there is a difference between these processes. In the world of regulatory compliance, the terms are synonymous, but they have different meanings. So AML stands for “Anti-Money Laundering” while KYC stands for “Know Your Customer”.
Know Your Customer has four main objectives:
1. Verification of client data.
2. Cooperation with AML.
3. Compliance with the accepted KYC rules.
4. Applying identification data from verified suppliers.
Any document that proves identity: passport, driver’s license, bank statements, utility bills.
Steve Davey is the chief editor and author of the English-language section at our portal. With a keen eye for compelling topics in American media, Steve not only shares his insights but also occasionally translates them for our audience. His expertise in uncovering engaging stories and his editorial skills contribute significantly to the richness of our content.