The meaning of KYC
KYC stands for "Know Your Customer" or "Know Your Client" and is an important tool for the financial sector in particular to check the identity of its customers with regard to compliance (sanction lists, PEP status, CRIME, blacklists or watchlists). KYC is part of the Simplified Due Diligence (SDD) of financial intermediaries as part of a compliance process. It is operated with the aim of preventing white-collar crime or money laundering.
For banks in Switzerland, KYC checks before the start of a contractual relationship are a means of fulfilling FINMA's regulatory requirements. It checks whether business partners are trustworthy based on suspicious transactions or hits on a risk list (e.g. sanctions lists or PEP lists).