Purchase Solution

Principles of Knowing Your Customer

Not what you're looking for?

Ask Custom Question

?What are the general principles of KYC (Knowing your customer)?
?Who should be verified, and what is meant by low risk and high risk when it comes to customers and products?

Discuss at least three low risk and three high risk characteristics or types of each.

?When should it be done and how? Include the different data sources you would use.
?How and why do you check the source of funds?
?When should the red flags go up on identity, source of funds?
?What sort of records should be kept?
?Give examples of what to do if the following happens:
Your client lives in a foreign country. They don't have an on-ground address. They are a PEP.
?Would you do anything differently if you worked for an insurance company?

Purchase this Solution

Solution Summary

The principles of knowing your customer is determined. The expert discusses at least three low risk and three high risk characteristics or types of each.

Solution Preview


General principles

KYC principles make it a requirement for banks and other companies to know the identity of their clients, the source of monies being transferred into an account and the type of business a company will undertake. The supply of this information is a legal requirement and clients must provide full and frank information about themselves, their business dealings and their future plans (http://www.icd-london.fr/en/confidentiality/know-your-customer-principles.html).

In relation to this, the Capital Markets and Financial Institutions Supervisory Agency has issued a regulation regarding application of the 'know your customer' principle by financial services providers in the capital markets sector. The regulation was issued under Decree KEP-476/BL/2009. http://www.internationallawoffice.com/newsletters/detail.aspx?g=8953f282-5fce-4f1c-8dcf-f9a7adc2e622

Through the information that will be supplied by the clients, the company could determine the level of risk in the financial transactions that will be made with them. The information could indicate some manifestations of possible violations of the Money Laundering Act.

Under the 'know your customer' principle, financial services providers in the capital markets sector must: (http://www.cimbniaga.com/index.php?ch=gen_about&pg=gen_about_us&ac=25&tpt=niagabiz)

1. establish a working unit or assign an officer of a rank below director to be in charge of application of the 'know your customer' principle;
2. stipulate written policies and procedures concerning: a)customers' acceptance, identification and verification; b) the monitor of customer accounts ...

Solution provided by:
  • Bachelor of Science in Business Administration, University of the Philippines
  • Master in Business Administration, Saint Mary's University
  • Doctor of Philosophy in Education, University of the Philippines
  • Doctor in Business Adminstration (IP), Polytechnic University of the Philippines
Recent Feedback
  • "Excellent information thanks for the input"
  • "Thank you"
  • "Very thorough and informative. Thank you."
  • "Good response. Very detailed"
  • "This solution is excellent. Thank you"
Purchase this Solution

Free BrainMass Quizzes
Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.


This tests some key elements of major motivation theories.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.