Navigating KYC Requirements for U.S. Financial Institutions: What is KYC and Why is it Important?


As products and services have shifted online, it has become harder to know who your customers actually are, making the concept of “Know Your Customer” (KYC) more important than ever. This is particularly true for financial services institutions in the United States, where the requirements for KYC, known as the Customer Identification Program (CIP) Rules, are specific and divergent from the rest of the world.

In this first installment of a series of posts designed to demystify these KYC requirements, Orrick Senior Associate Parag Patel and SentiLink General Counsel James Cook define what KYC means for financial institutions in the United States, discuss how the CIP Rules came about, and review the roles of different agencies involved in the enforcement of the CIP Rules.