Know-Your-Customer (KYC) is a regulatory guideline and procedure that obligates financial institutions as part of their customer due diligence (CDD) process to screen and verify the identities of all their customers periodically in order to ensure that they are true and accurate. Banks, centralized exchanges, and other financial service providers implement KYC procedures in order to prevent cases of identity theft, money laundering, terrorism financing, and other illicit transfer of funds.
Minimum KYC procedures cover the verification of a customer’s identity document and may include facial verification as well. Many countries vary in terms of KYC regulations, but they are set in place in order to minimize the incidences of fraud.