In plain English
Know your customer (KYC) is the everyday name for establishing who a customer is, confirming it with reliable evidence, and understanding what they do and why they use your services.
In regulatory terms most of this sits within customer due diligence (CDD), and the two terms are often used interchangeably. KYC is not a one-off exercise: customer information has to be kept up to date as the relationship continues.
Why it matters to a board
KYC quality drives everything that follows. Risk ratings, monitoring and screening are only as good as the customer information they rely on, and poor customer information is hard and costly to fix after the event.
Common mistakes
- Collecting documents without understanding the customer's business or expected activity.
- Letting information go out of date.
- Treating onboarding as the only moment that matters.
What the standards and regulators say
- FATF Recommendations: international standards on combating money laundering and the financing of terrorism and proliferation
- UAE: Federal Decree-Law No. 10 of 2025 on anti-money laundering and combating the financing of terrorism and proliferation, and its executive regulations (Cabinet Resolution No. 134 of 2025)