BANKING AFFAIRS

Detailed explanation-1: -Know Your Customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering and terrorist financing. KYC involves several steps to: establish customer identity; understand the nature of customers’ activities and qualify that the source of funds is legitimate; and.

Detailed explanation-2: -KYC references a set of guidelines that financial institutions and businesses follow to verify the identity, suitability, and risks of a current or potential customer. The goal is to identify suspicious behavior such as money laundering and financial terrorism before it ever materializes.

Detailed explanation-3: -KYC is required for any financial institution that deals with customers while opening and maintaining financial accounts. When a business onboards a new client, or when a current client acquires a regulated product, standard KYC procedures generally apply.

Detailed explanation-4: -In the banking sector, KYC is all about risk management-by knowing more about their customers, banks can reduce the risk of fraudulent transactions, reduce the likelihood of their system being used to commit crimes such as money laundering, and reduce the potential for non-compliance with FinCEN and FINRA rules.