KYC stands for Know Your Customer. KYC is a regulatory and legal obligation for payment institutions to identify and verify the identity of their clients. When you open a bank account and make financial transactions in your everyday life, the institutions involved in the transactions have different ways of verifying who you are, often by asking for proof of identity such as a copy of your passport.
Financial institutions and banks undertake the KYC process to comply with various anti-money laundering (AML) regulations and regulations countering the financing of terrorism (CFT). In addition, this is also to protect clients from identity theft and fraudulent activities on the accounts.