Quick Definition

Know Your Client (KYC) refers to the process financial institutions use to verify the identity, suitability, and risks involved with maintaining a business relationship with a client.

Examples

• 1A bank requires new customers to provide a government-issued ID and proof of address before opening an account.
• 2An investment firm conducts a detailed financial background check on a potential client to assess their investment suitability and risk tolerance.
• 3A cryptocurrency exchange asks users to upload a selfie with their ID to ensure the person creating the account is the rightful owner of the ID.

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