Know Your Customer (KYC)
KYC (Know Your Customer) is a mandatory client identification and verification procedure performed by financial institutions to prevent fraud and money laundering.
What is KYC
KYC (Know Your Customer) is a mandatory procedure for identifying and verifying a client performed by financial institutions before starting service. The purpose of KYC is to prevent fraud, money laundering (AML) and terrorist financing (CFT). In Russia, KYC is regulated by 115-FZ and 152-FZ.
How the KYC procedure works
- Data collection — passport, INN, SNILS, address.
- Document verification — using MRZ recognition and OCR technologies.
- Biometric check — 3D face recognition or voice biometrics.
- Database check — against sanctions lists.
- Risk assessment.
Types of KYC
- Basic — simple verification for low-limit operations.
- Standard — full verification of documents and income sources.
- Enhanced (EDD) — for high-risk clients.
KYC and AML
KYC is part of the AML system: monitoring transactions, analyzing suspicious operations, interaction with regulators (115-FZ).
Advantages of KYC
Reduced fraud risks, regulatory compliance, increased trust, process automation.
Frequently asked questions
What is KYC in simple words?
KYC is a procedure in which a bank verifies who you are and where your money comes from. OCR recognition and biometric identification are used.
What documents are needed for KYC?
A passport, INN, SNILS and address confirmation. For legal entities — constituent documents and beneficiary data.
How long does the KYC procedure take?
Basic KYC takes 5-15 minutes. Standard verification 1-3 business days. Enhanced (EDD) up to 2 weeks.
What happens if you fail KYC?
You will not be able to open an account or use financial services. The bank may block an existing account.
Are KYC and AML the same thing?
KYC is client identification. AML is a broader system that includes KYC, transaction monitoring and interaction with regulators (115-FZ).
How do technologies speed up KYC?
OCR, MRZ recognition and biometric identification reduce the procedure to 5-15 minutes.
What KYC changes are expected soon?
Stricter requirements, remote identification via ESIA and biometrics, AI-based risk assessment systems.
Other terms in «Fintech»
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Know Your Customer (KYC)
KYC (Know Your Customer) is a mandatory client identification and verification procedure performed by financial institutions to prevent fraud and money laundering.
All categories
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