Know Your Customer
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?
collecting a passport, confirming an address, and understanding the purpose of the engagement are all KYC steps that accountants complete at client onboarding.
Other terms that go with Know Your Customer
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 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.
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.
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, audit-ready records — to apply it across every client.
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