What is a “Know Your Customer” (KYC)?

One way organizations have responded is by expanding their “Know Your Customer” (KYC) efforts. KYC references a set of guidelines that financial institutions and businesses follow to verify the identity, suitability, and risks of a current or potential customer.

Do financial institutions need to verify customers' information?

Financial institutions are required to verify a customer's information at the onset of a business relationship. "In its simplest form, when a person opens a bank account, they are required to provide the bank several pieces of identifying information," says Brandon Koeser, financial services senior analyst at RSM US LLP.

What information do you need to verify a person?

At a minimum, you usually need to collect and verify four pieces of identifying information: the individual’s name, date of birth, address, and identification number.

What are the components of a Know Your Customer program?

There are three critical components in any Know Your Customer program: Financial institutions must verify the identity of all customers. The minimum requirements to open an account with a financial institution are the client's name, birthday, address and identification number.