{"head":{"title":"What Is KYC (Know Your Customer)? Definition | OceanLab","description":"KYC is how a regulated business checks that customers are who they say they are and judges their risk. What it involves and how it shows up in apps.","canonical":"https://oceanlab.in/glossary/kyc"},"crumbs":[{"name":"Home","path":"/"},{"name":"Glossary","path":"/glossary"},{"name":"KYC","path":"/glossary/kyc"}],"slug":"kyc","term":"KYC (know your customer)","aka":["know your customer","CIP","customer due diligence"],"category":"Payments and fintech","short":"The checks a regulated business runs to confirm a customer is who they say they are and to judge the risk they pose.","body":[["KYC starts with collecting and verifying identity. For US banks, the customer identification program rule in 31 CFR 1020.220 sets the minimum: name, date of birth for individuals, address and an identification number, verified through risk-based procedures so the bank can form a reasonable belief that it knows the customer's true identity."],["Beyond identity, KYC includes understanding the purpose of the account, rating the customer's risk, and keeping the information up to date. Businesses as customers go through ",{"href":"/glossary/kyb","text":"KYB"},". KYC is part of a wider ",{"href":"/glossary/aml","text":"AML"}," program."]],"why":["KYC is the first thing a new user meets in most fintech apps, so it shapes sign-up conversion as much as compliance. Every check also has a cost per customer, and failed or manual reviews slow onboarding. Designing the flow well is a product problem, not only a legal one."],"example":["A neobank's sign-up asks for name, date of birth and address, then a photo of an ID and a selfie through an identity verification provider. Clear cases pass in a minute. Unclear ones go to a review queue, and the user sees a status screen instead of a dead end."],"inBuild":["In a product build KYC is a flow of screens, calls to a verification vendor, a review queue and stored evidence. The /build guide on KYC onboarding covers how those pieces fit."],"mistakes":[["Asking for every document up front, when lower-risk users could start with less."],["No path for users the automated check cannot decide, so they just drop off."],["Storing ID images without strict access control and retention rules."]],"related":[{"href":"/glossary/kyb","label":"KYB (know your business)","detail":"Checking a business customer: that it legally exists, who owns and controls it, and how risky it is."},{"href":"/glossary/aml","label":"AML (anti-money laundering)","detail":"The laws, checks and controls that stop criminals from moving or hiding illegal money through financial services."},{"href":"/glossary/pep","label":"PEP (politically exposed person)","detail":"Someone who holds or held a prominent public role, or a family member or close associate of one, treated as higher risk for corruption."},{"href":"/glossary/sanctions-screening","label":"Sanctions screening","detail":"Checking customers, counterparties and payments against government sanctions lists before letting money move."}],"tools":[{"href":"/tools/kyc-cost-per-check","label":"KYC cost per check","detail":"Free tool"},{"href":"/tools/fintech-app-cost","label":"Fintech app cost","detail":"Free tool"}],"links":[{"href":"/build/kyc-onboarding","label":"Building KYC onboarding","detail":"Identity checks, business checks and review queues."},{"href":"/software/banking","label":"Software for banking","detail":"Banking systems, controls and regulation."},{"href":"/software/payments","label":"Software for payments","detail":"Payment systems and the compliance work they bring."}],"sources":[{"title":"31 CFR 1020.220, Customer identification programs for banks (eCFR)","url":"https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1020/subpart-B/section-1020.220","checkedAt":"2026-10-25"},{"title":"31 CFR 1010.230, Beneficial ownership requirements (eCFR)","url":"https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-B/section-1010.230","checkedAt":"2026-10-25"}],"legal":true,"updatedAt":"2026-10-25"}