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Customer Identification Program (CIP) and know your customer (KYC) compliance

Reducing customer friction and verifying customer identities while accurately assessing risk

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What are CIP and KYC?

Businesswoman listening meeting

What’s CIP?

CIP refers to regulatory requirements that require financial institutions to verify the identities of their customers. CIP is part of a larger set of regulatory requirements aimed at preventing the U.S. financial system from being used to perpetrate fraud, launder money, finance terrorism and other nefarious activities. Since May 2018, changes to CIP require identity verification of beneficial business owners and require CIP programs to cover events that trigger reverification.

Through working with our team, we can help you decrease the need for manual intervention, access verification data in real time, define a “match” for identity elements, execute step-up authentication when necessary, and consolidate the costs related to CIP and fraud risk scoring.

What’s the KYC rule?

KYC goes beyond basic identity verification and includes the assessment of fraud risk in new and existing customer accounts. Financial institutions are required to incorporate risk-based procedures and provide detail about products, portfolios, acquisition channels, etc. Institutions should have processes to monitor customer transactions and detect potential financial crimes or fraud risk. KYC policies help determine when suspicious activity reports (SAR) need to be filed with the Department of Treasury's FinCEN organization. The following organizations have KYC oversight: Federal Financial Institutions Examinations Council (FFIEC), Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB).

Improving your CIP and KYC programs

Understand the risk of new digital identities and acquire profitable, legitimate customers while maintaining ongoing monitoring to understand and better mitigate risk.

Confidently verify customer identities

Combine customer identification and customer due diligence to verify with a “reasonable” belief that the identity is valid and assess associated risks of doing business.

Seamless authentication

Reduce compliance risk and customer friction with step-up authentication and use of diverse and reliable data.

Understand and anticipate customer activities

Implement ongoing monitoring and make fast and easily interpreted authentication decisions.

We can help with your CIP compliance

  • Help comply with the Patriot Act, Red Flags Rule and Bank Secrecy Act/Anti-Money Laundering Acts.
  • Leverage an automated workflow using the most diverse and reliable data in the industry as well as step-up authentication, such as document verification and knowledge-based association (KBA) questions.
  • Help meet new regulatory guidelines that are pushing requirements deeper into commercial lending.
  • Replace subjective decisions with automation and enable customers to define a match.
  • Generate CIP decisions as part of a fraud-risk scoring process to consolidate vendors and transaction costs.
  • Focus on growth and verify emerging populations beyond what’s available in traditional consumer credit data.

Our tools can help you

  • Satisfy compliance regulations and leverage consulting on how to use regulations to become a source of competitive advantage.
  • Gain the ability to run customer authentication software in real time or through batch processing services.
  • Make fast and easily interpreted authentication decisions.
  • Confidently investigate a customer’s identity elements without causing customer friction.
  • Utilize our entire breadth of data sources to gain a complete picture of each of your applicant’s or customer’s identity.
  • Enable your customer identification program and risk-based procedures.

Insights

Tip sheet

Solving for the biggest problem you aren’t solving

Learn how to find a CIP solution that works for you.

Three pillars of identity relationship management

Discover how to link people, places and things across the lifecycle via identity relationship management.

The real cost of ID verification: CIP

Explore why barriers to growth, high customer friction and high costs dominate the CIP landscape.

From fraud prevention to identity verification: Know your customer and spot the fraud

See why our industry must embrace evolution to balance business growth with consumer safety and security.

Frequently asked questions

According to the FFIEC, a KYC program should include:

  • Customer Identification Program (CIP): Identifies processes for verifying identities and establishing a “reasonable” belief that the identity is valid
  • Customer due diligence: Verifying customer identities and assessing the associated risks of doing business
  • Enhanced customer due diligence: Significant and comprehensive review of high-risk or large transactions and implementation of a suspicious activity-monitoring system to reduce risk to the institution
CIP KYC graphic

Don’t underestimate the power of CIP and KYC

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