Quick answer
KYC stands for 'know your customer'. It is the process a financial firm uses to identify a customer, verify that identity and understand what the account will be used for, as anti-money laundering rules require[1].
Key points
- KYC = identify the customer, verify the identity, and understand the purpose of the relationship.
- US banks must collect at least name, date of birth, address and an ID number before opening an account.
- KYC continues after onboarding through ongoing monitoring and updates.
On this page
#What does a KYC check involve?
Regulators usually call KYC customer due diligence. Under the UK rules, a firm must identify the customer, verify the customer's identity, and assess the purpose and intended nature of the business relationship[1]. In the US, a bank's customer identification programme must collect at least a name, a date of birth (for individuals), an address and an identification number, then verify them within a reasonable time after the account is opened[2]. The full process is explained in KYC explained.
Worked example
Example
You download a payment app. It asks for your name, date of birth and address, a photo of your passport and a short selfie video. The app compares the selfie with the passport photo, checks your details against independent data and screens your name against sanctions lists. Months later it asks you to confirm your address again: that is the 'ongoing' part of KYC.
#Why do financial firms need KYC?
Anonymous accounts make it easy to hide where criminal money comes from. KYC links every account to a real, verified person, which supports anti-money laundering controls and sanctions screening. The FATF, which sets global anti-money-laundering standards, has said reliable, independent digital ID systems can be used for these identity checks[3].
#Is KYC the same as AML?
No. AML is the whole system of rules for preventing money laundering; KYC is one part of it, focused on knowing who the customer is. Other parts include monitoring transactions and reporting suspicious activity.
Frequently asked questions
Do I have to do KYC again if I already did it at another bank?
Usually yes. Each regulated firm has its own legal duty to identify and verify its customers[1].
Is a selfie check part of KYC?
Often. It is one way to verify that the person applying matches the identity document, and FATF guidance covers how digital ID can support these checks[3].
Sources
- The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, regulation 28 (Customer due diligence measures) — legislation.gov.uk, 2026 Primary
- 31 CFR 1020.220 — Customer identification program requirements for banks — eCFR (US Code of Federal Regulations), 2026 Primary
- Guidance on Digital Identity — Executive Summary — Financial Action Task Force (FATF), 2020 Primary
