Know Your Customer (KYC) is a process by which financial institutions and other regulated entities verify the identity, suitability, and risks associated with a client relationship. KYC procedures are critical to preventing financial crimes such as money laundering, terrorist financing, and fraud. It involves collecting and verifying personal information such as name, address, date of birth, and identification documents. KYC also includes assessing the customer's financial behaviour, source of funds, and risk profile.  

Financial institutions must implement KYC procedures to comply with regulatory requirements and maintain the integrity of the financial system. This process helps institutions detect suspicious activities, mitigate risks, and ensure they are not inadvertently facilitating illegal activities. KYC is an ongoing process, with periodic updates and continuous monitoring of customer transactions to identify any anomalies or changes in behaviour.  

Effective KYC practices enhance trust and security, protect against financial crimes, and contribute to a stable and transparent financial environment. By knowing their customers well, institutions can provide better services and maintain regulatory compliance.