Effective KYC involves knowing your customers'customers' identities, financial activities, and the risks they pose.

At least, that's how it should be. If you are a financial institution (FI) that promotes money laundering or terrorist financing, you may be subject to fines, penalties, and defamation. Most importantly, KYC is a key practice that protects organizations from fraud and losses resulting from illicit funds and transactions.

Understand the nature of your business (The main purpose is to ensure that the client's source of funds is legitimate.)

To monitor the activities of our customers, we assess the money laundering risk associated with these customers.