Know your customer (KYC)

According to ACAMS International Glossary of Key Money Laundering Terms and Acronyms, the term 'Know your customer (KYC)' is used to describe a set of money laundering control policies and procedures that are employed to determine the true identity of a customer/client and the type of activity that will be 'normal and expect­ed' for the customer, as well as to detect activity that should be considered 'unusual' for the particular customer. Many experts believe that a sound KYC program is one of the best tools in a good anti-money laundering pro­gram and for detecting suspicious activity. To some extent, Enhanced Due Diligence (EDD) or Verification of Customer Identification have supplanted the term KYC.