Banks, Financial Institutions, and Corporations conduct Know Your Customer (KYC) and AML compliance checks on customers to:
Know Your Customer (KYC) and AML check are mandatory process of identifying and verifying the client's identity when opening an account and periodically over time throughout the customer journey. In other words, banks must make sure that their clients are genuinely who they claim to be.
The operational tasks are based on recommendations by the Financial Action Task Force (FATF) and widely adopted by central banks worldwide. It mandate that financial institutions under its purview undertake the following:
Know Your Customer (KYC) and AML checks on both customer and supplier, or annual supplier audits are usually conducted by large corporations as part of their compliance practices and form part of the risk assessment process for a company's existing or potential customers or supplier under AML guidelines. This is to ensure that they are not unwittingly breaching sanctions or participating in AML, CTF activities without checking who their vendors are or who their customers are connected to.
With AML screening, businesses ensure that their existing or potential customers or suppliers are not present in any of the sanctions lists, PEPs, banned or wanted lists, and adverse media data.