What does the acronym "KYC" stand for?

The acronym "KYC" stands for "Know Your Customer." This term is widely used in the financial services industry and refers to the process of a business verifying the identity, suitability, and risks involved with maintaining a business relationship.

KYC procedures are crucial in preventing fraud, money laundering, and terrorist financing. By understanding their customers, businesses can assess risks more effectively and ensure compliance with regulatory requirements.

The focus on customer identity helps organizations build trust, ensure accurate record-keeping, and adhere to legal standards regarding financial transactions. This proactive measure is essential for maintaining the integrity of financial systems and protecting the institution from illicit activities.

In contrast, the other options reflect variations that do not accurately capture the essence of KYC. "Know Your Contractor" does not relate to customer identification in a financial context, while "Keep Your Compliance" and "Knowledge Yield Compliance" are not established terms used in this area, further distinguishing "Know Your Customer" as the correct interpretation of KYC.