Here’s a more detailed breakdown : Purpose: KYC helps banks ensure their customers are who they claim to be and understand the nature of their financial activities. Process: Banks collect and verify information like name, address, date of birth, and government-issued IDs. They may also use face-to-face meetings, digital verification, or a combination of both. Regulations: KYC is mandated by law in many countries to maintain the integrity of the financial system. Benefits: KYC protects banks from financial crimes, helps prevent fraud, and contributes to a safer financial ecosystem. Beyond initial verification: KYC isn’t just a one-time process. Banks periodically re-verify customer identities throughout their relationship with the bank. Anti-Money Laundering (AML): KYC is a crucial component of a bank’s AML efforts. Risk assessment: KYC helps banks assess the risks associated with their customers, including potential risks of money laundering, terrorist financing, or other illicit activities.