KYC usually covers identity verification at onboarding, collecting information on the customer's activity and expected account use, screening against sanctions and PEP lists, and keeping the information up to date.
Example
A fintech app asks a new user for ID, runs a liveness check and screens the name before opening the account.
Where it appears in the exams
This topic is relevant for CAMS, CFCS.
Related terms
- Customer due diligence (CDD): Customer due diligence is the set of checks a firm does on a customer: identify and verify them, identify the beneficial owner, understand the purpose of the relationship, and monitor it over time.
- Enhanced due diligence (EDD): Enhanced due diligence is the additional scrutiny applied to higher-risk customers, relationships or transactions, beyond standard customer due diligence.
- Sanctions screening: Sanctions screening is checking customers, owners, counterparties and payments against sanctions lists to make sure the firm does not deal with listed persons or prohibited activity.
Source: FATF Recommendation 10 (customer due diligence). Independent explanation for study purposes, not legal advice.