KYC
Know Your Customer
It is a process used by the financial industry and regulators to identify and understand the background of a customer, and is an important part of anti-money laundering and counter-terrorist financing measures. The goal of KYC is to ensure that financial institutions are able to identify their customers, understand the nature of their business, the source of funds, and the pattern of transactions, thereby reducing the risk of being involved in illegal activities.
During the KYC process, financial institutions typically ask customers to provide the following information:
- Basic identification information: such as full name, date of birth, nationality, address, copy of ID card or passport, etc.
- Career and source of income: Understand the client’s career, source of income, and financial situation.
- Purpose and nature of the transaction: Confirm the purpose of the client’s transaction, understand the nature of the business and the use of funds.
- Risk Assessment: Determine appropriate regulatory and review measures based on the client’s risk level.
KYC procedures are usually carried out at the time of establishing a business relationship and are continuously monitored for the duration of the customer relationship. This helps financial institutions comply with local laws and regulations, such as the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), and ensures the integrity and stability of their operations.
