Customer Identification Program (CIP)
A Customer Identification Program or CIP is a mandatory process for financial institutions in order to stay compliant with Anti-Money Laundering and Combating the Financing of Terrorism regulations. It mandates the identification and verification of customers to mitigate risks associated with financial crime. It makes up a key part of Know Your Customer (KYC) alongside watchlist screening and transaction monitoring.
Customer verification process
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CIP
Examples
Before a person can open a bank account, they must go through the KYC process. The first part of KYC is handled by the Customer Identification Program and has the person in question submit identification documents that are then verified by the bank by comparing them to official government information. Further KYC then includes performing background checks, assigning a risk profile, and continued monitoring.
FAQ
What information is required under a CIP?
Customers typically must provide their full name, date of birth, identification number (for example, their ID or passport), and proof of address. Further information may be needed if performing Enhanced Due Diligence.
When is a CIP performed?
A CIP is performed at the start of a business relationship, such as when opening a bank account or conducting high-value transactions.
What happens if a customer fails a CIP?
If a financial institution cannot properly verify a customer they may decline the business relationship, escalate the case and perform Enhanced Due Diligence and/or report the matter to relevant regulatory authorities.
