IT Glossary
What is KYC (Know Your Customer)?
KYC (Know Your Customer) is the process by which a company verifies a customer’s identity before serving them — mandatory in sectors regulated against money laundering.
KYC is not the tedious form you fill in when opening a bank account; it is the legal mechanism that decides whether you are allowed to do business with somebody at all. Know Your Customer means verifying the customer’s identity — identity document, address, and for companies the ultimate beneficial owner — and assessing the risk they present, before an account is opened or a single transaction is processed. The obligation comes from anti-money-laundering legislation and covers banks, payment institutions, crypto-asset services and insurers, but also notaries, estate agencies and accountants, under the rules in force in each member state. For a company launching a digital product in one of those areas, KYC is a component to be built rather than a paper to be signed: document upload flows, automated document verification, biometric comparison of a selfie against the photo in the ID, screening against sanctions lists. Done by hand the process drives customers away — most abandon a sign-up that takes days. Automated through specialist APIs it takes two minutes and quietly becomes a competitive advantage against slower incumbents.
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Why it matters for your business
Onboarding in minutes, not days
Automated document checks and biometric matching turn signing up a new customer from a week of email exchanges into a self-service flow of a few minutes.
Compliance you can demonstrate at audit
Every check stays recorded with its date, its result and the documents used — when the supervisory authority asks for evidence, the report is exported rather than reconstructed.
Fraud stopped at the door
Forged documents, synthetic identities and people on sanctions lists are caught before they become customers, not after they have caused losses.
Frequently asked questions
Which companies are obliged to run KYC checks?
The reporting entities defined by anti-money-laundering law: financial and payment institutions, crypto-asset service providers, insurers and gambling operators, plus professions such as notaries, lawyers in certain operations, estate agents and accountants. If your digital product touches customer money or assets, check at design stage whether those obligations reach you.
How does a fully online KYC check work?
The customer photographs their identity document and records a short video selfie; the system extracts the data from the document, checks its security features, biometrically compares the face with the ID photograph and screens sanctions and politically-exposed-person lists. It usually completes in under five minutes, with ambiguous cases escalated to a human reviewer.
What is the difference between KYC and KYB?
KYC verifies individuals; KYB (Know Your Business) verifies companies — commercial-register data, shareholding structure and, crucially, the ultimate beneficial owner, meaning the human being at the end of a chain of holding companies. B2B platforms need both: KYB for the company and KYC for the representative who administers the account.
Let’s talk about your project
Message us on WhatsApp or send an email — you talk directly to a developer.
office@northdan.com · +40 752 070 247