Comment by cynusx

Maybe less important than knowing what it stands for is knowing what the implications are for businesses.

KYC is essentially about knowing who you are doing business with.

For individuals that's relatively easy, just the name and identification is required but typically there is the need to verify that the identification actually belongs to the person signing up. In banking that's why you typically have some video call with a verification provider.

For businesses it gets a lot more complex because it's not enough to know what business your client is, you also have to look through its corporate structure to figure out who the "ultimate beneficial owner" is. Essentially, who is actually controlling the business.

Now it got a lot easier recently as many countries now require businesses to file who their ultimate beneficial owners (UBOs) are.

The painful part is that it introduces friction in customer journeys as now you have to request the documentation.

In the financial industry you also have to run checks on those UBO's so that they are not known terrorists or sanctioned individuals but it seems this regulation is just that IaaS providers need to know who actually operates a server. Presumably for forensic analysis after a cyber attack.