The Evolution Of KYC: Exploring Perpetual Know Your Customer (PKYC)

Know Your Customer (KYC) is a fundamental process used by Financial Institutions (FIs) to verify the identities of their customers and assess the associated financial crime risk. Its primary goal is to prevent money laundering, fraud, and other illicit activities within the financial system. Therefore, it should be more than a documentation process, but a process designed to effectively identify and manage risk.

Given that the KYC process is often the first interaction a customer has with an FI it is also important that the process is as smooth as possible. However, there is a natural tension between these two goals. On one hand, the FI needs to obtain sufficient customer information to manage the risk and serve the customer's needs and, on the other hand, the customer simply wants to execute transactions as quickly and seamlessly as possible. The key objectives of KYC are to enable the FI to: