AML glossary · UKKYC

Know Your Customer

Definition

Know Your Customer is the process of verifying the identity of a client, understanding their business activities, and assessing the risk they present. KYC is the practical expression of Customer Due Diligence obligations. It answers the question: who is this person or business, and is it safe to act for them?

In practice

collecting a passport, confirming an address, and understanding the purpose of the engagement are all KYC steps that accountants complete at client onboarding.

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For every role

How different roles use Know Your Customer

A good definition should change the next action for the person reading it.

Partner or director

Check whether this term affects acceptance risk, fee scope, supervision exposure, or sign-off responsibility.

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MLRO or compliance lead

Map the term to evidence, escalation, monitoring, training, and inspection readiness.

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Client-facing team member

Use the plain-English explanation to ask better client questions and write clearer file notes.

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Related terms

Other terms that go with Know Your Customer

Customer Due DiligenceCDD

Customer Due Diligence is the core legal obligation under MLR 2017 to identify clients, verify their identity using reliable independent sources, and understand the purpose and intended nature of the business relationship. Standard CDD applies to most clients. Where risk is elevated, Enhanced Due Diligence (EDD) is required instead.

Enhanced Due DiligenceEDD

Enhanced Due Diligence is a more thorough level of client verification required when a relationship presents a higher risk of money laundering or terrorist financing. EDD steps typically include verifying the source of funds, establishing source of wealth, obtaining senior management approval before onboarding, and applying more frequent ongoing monitoring.

Beneficial owner

A beneficial owner is the natural person who ultimately owns or controls a legal entity, such as a company or trust, or on whose behalf a transaction is being conducted. Identifying beneficial ownership is a core CDD obligation where clients are companies, partnerships, or trusts, since the legal owner and the true controlling person may be different.

Before you treat Know Your Customer as handled

  • Confirm which regulation, policy, or internal procedure the term maps to.
  • Document the decision or evidence trail in the client file, not only in email or chat.
  • Escalate where the term indicates higher risk, sanctions exposure, PEP status, suspicion, or missing evidence.
  • Keep the wording consistent across onboarding, review notes, training material, and inspection packs.

Put Know Your Customer into practice with Certivus

Knowing the term is the first step. Certivus gives you the workflows, client intake, CDD, EDD, PEP and sanctions screening, and audit-ready records to apply it across every client.

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