In Zimbabwe, the Know Your Customer (KYC) principle is a crucial
component of compliance in the financial sector. KYC is a
risk-based approach that allows for financial institutions to
understand their customers' identity, behaviour, and nature of
transactions so as to curb illegal activities such as money
laundering to which is at it prevalence. This article scratches
into the essence of KYC in compliance from a Zimbabwean
perspective.
Background
Globally, the financial sector has more often than not, been
subjected to and made vulnerable to various risks in so many ways,
including money laundering, terrorist financing, and fraud. In
Zimbabwe, the Reserve Bank of Zimbabwe (RBZ) and other regulatory
bodies have implemented KYC requirements to mitigate these risks.
The RBZ requires financial institutions to conduct thorough
customer due diligence to ensure that they are doing business with
legitimate customers on legitimate terms.
