Know your customer programs (KYC), verify the customer’s identity and assess the risk a customer poses to the organization, and require the organization to understand nuanced details about the account holder, including the nature of their business, source of income, and business relationships.
- As the organization processes cash transactions for the account holder, the transaction must be evaluated against the understanding of the business to identify suspicious activity.
- Know your customer risk assessment processes must be ongoing, not a one-time evaluation, and need to involve different areas of the organization to be comprehensive.
- Training is essential so people across the organization understand their role in the know your customer/anti-money laundering program.
