Often we come across the phrase KYC or Know Your Customer, but do not know its significance. In the business world, especially, in the finance industry, the term KYC holds greater importance. KYC refers to a process in which businesses verify their customers before onboarding them. Customer verification helps deter the risks associated with each identity. This is done in order to reduce financial crimes such as money laundering and terrorist financing activities that are done when bad actors misuse the legitimate financial system.