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Business
Know Your Customer
The process of verifying the identity of clients to prevent money laundering, fraud, and other illegal activities.
KYC is mandatory for financial institutions under global regulations. It includes ongoing monitoring. Digital KYC (using video or biometrics) has made the process faster. Failing KYC rules can lead to huge fines and reputational damage.
It's checking someone's ID before letting them into the VIP section of your club.
Real world: When you open a bank account or sign up for a crypto exchange, they ask for passport/ID, proof of address, and sometimes source of funds. This is KYC. It helps the business stay compliant with anti-money laundering laws.
💡 KYC protects the business and the financial system from being used for crime.