Know Your Customer (KYC) is the legally-mandated process by which a regulated business verifies the identity of a customer and assesses the risk that the relationship will be used for money laundering, terrorist financing, fraud, or sanctions evasion. KYC is not a single check — it is a programme that runs from onboarding through the entire customer lifecycle.
The legal basis for KYC
In Bangladesh, KYC obligations flow from the Money Laundering Prevention Act 2012, the Anti-Terrorism Act 2009, and the master circulars issued by the Bangladesh Financial Intelligence Unit (BFIU). Internationally, the framework is set by the Financial Action Task Force (FATF) and operationalized through local regulators (Bangladesh Bank for banks and NBFIs, IDRA for insurance, BSEC for capital markets, BTRC for telecom).
What KYC actually requires
- Customer identification (CIP): Collect and verify identifying information — name, date of birth, address, government-issued ID number.
- Customer due diligence (CDD): Assess the customer's risk profile based on occupation, source of funds, geography, and product usage.
- Enhanced due diligence (EDD): Apply additional checks for high-risk customers — politically exposed persons, high-risk jurisdictions, cash-intensive businesses.
- Ongoing monitoring: Continuously screen for sanctions, adverse media, and transaction anomalies.
- Record-keeping: Retain verification artifacts for 5 years (Bangladesh) or longer in some jurisdictions.
Manual KYC vs electronic KYC (eKYC)
Manual KYC means a human reviews a physical or scanned document. It's slow, expensive, and error-prone. eKYC means software does the verification — OCR reads the document, computer vision proves the user is alive, an API confirms the identity record matches a source of truth. eKYC reduces onboarding from days to seconds and dramatically improves audit consistency.
How modern KYC stacks are built
A modern KYC stack is composable: identity verification (NID/passport), liveness, document OCR, sanctions/PEP screening, and a case-management layer for human review. KYC.bd provides each of these as a discrete API, so you wire only what you need.
Next: read the eKYC implementation guide, the KYC process step-by-step, or the Bangladesh AML guide.