CIP vs KYC: What is a Customer Identification Program?

Customer Identification Program (CIP) is a legal requirement under the Bank Secrecy Act and USA PATRIOT Act requiring certain financial institutions to verify the identities of customers opening accounts, while Know Your Customer (KYC) refers more broadly to the processes used to establish and manage customer identity and risk. CIP requirements include collecting core identifying information, applying identity-verification procedures, screening government sanctions lists, keeping verification records for prescribed periods, and informing customers that their information is being collected. Within a broader KYC program, CIP is typically combined with customer due diligence, which varies according to customer and transaction risk, and ongoing monitoring for suspicious activity or sanctions-list changes. The text notes that digital onboarding increases the challenge of meeting these obligations without adding customer friction, and presents Socure’s automated identity verification and continuous watchlist-monitoring products as tools intended to support CIP and KYC compliance.

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