Home › Career Guide › KYC Interview Questions

KYC Interview Questions & Answers (Beginner to Advanced)

Preparing for a KYC interview? This page combines the most common questions asked by banks, fintechs, and compliance teams worldwide — with simple, practical answers.

Use it as a quick revision sheet for KYC onboarding, CDD/EDD, screening (sanctions/PEP/adverse media), risk rating, and escalation decisions.

Beginner-Level KYC Interview Questions

1. What is KYC?

KYC (Know Your Customer) is the process of identifying and verifying a customer’s identity and assessing their risk before providing financial services. It helps prevent fraud, money laundering, and illegal activity.

2. Why is KYC important?

It protects the institution from financial crime, reduces fraud risk, supports regulatory compliance, and ensures the business understands who is using its services and why.

3. What are the 3 main components of KYC?

(1) Customer Identification (CIP) – verify identity, (2) Customer Due Diligence (CDD) – assess risk and understand customer profile, (3) Ongoing Monitoring – track changes and unusual activity.

4. What is CDD?

CDD (Customer Due Diligence) is the standard process of verifying identity, understanding the nature of the customer/business, assigning risk, and performing screening checks (sanctions/PEP/adverse media).

5. What is EDD?

EDD (Enhanced Due Diligence) is deeper investigation for high-risk customers. It includes stronger verification, more evidence for source of funds/wealth, ownership analysis, and additional approvals.

6. What is the difference between KYC and AML?

AML is the full framework to prevent financial crime (policies, monitoring, investigations, reporting). KYC is one key part of AML focused on customer identity, risk, and onboarding controls.

Document Verification Questions

7. What documents are used for KYC verification?

Typically a government ID (passport/national ID), proof of address (utility bill/bank statement), and for higher risk cases additional evidence like employment or source-of-funds documents.

8. How do you verify a customer’s address?

Review proof of address documents and ensure they are valid, recent, match the profile details, and meet policy requirements. If mismatched, request alternative evidence and document the outcome.

KYC Screening, Risk Assessment & CDD Questions

9. What is sanctions screening?

Screening customer names against sanctions lists (e.g., OFAC, EU, UN, UK) to ensure the institution does not do business with restricted persons or entities.

10. What is a false positive in screening?

A screening alert that looks like a match but is actually not the same person/entity. It must be resolved using additional identifiers before clearing.

11. What checks help resolve false positives?

• Date of birth / incorporation date
• Nationality / country
• Aliases / alternate spellings
• Address / location
• Occupation / business activity
• Other identifiers (ID number, registration number)

12. What is adverse media screening?

Checking credible sources for negative news related to fraud, corruption, crime, sanctions evasion, or investigations linked to the customer or related parties.

13. What is a PEP?

A PEP (Politically Exposed Person) is someone who holds (or has held) a prominent public role, or is closely associated with such a person, requiring stricter checks due to corruption/bribery risk.

14. What is risk rating?

Assigning low/medium/high risk based on customer type, geography, industry, products used, ownership complexity, expected activity, and screening results.

15. Name common KYC red flags.

• Address mismatch or unverifiable identity
• Multiple identities / inconsistent details
• Complex ownership without clear reason
• High-risk jurisdiction links
• Adverse media related to crime/fraud
• Unusual patterns vs customer profile

KYC Process & Decision-Making Questions

16. How do you decide whether to approve, reject, or escalate a customer?

Approve when documents are complete, screening is cleared, risk is acceptable, and the profile makes sense. Escalate when risk is high or unclear. Reject when mandatory information is refused or risk cannot be mitigated under policy.

17. What would you do if customer information is inconsistent?

Pause onboarding, request clarification and updated evidence, document the discrepancies, and escalate if inconsistencies remain unresolved.

EDD & High-Risk Customer Questions

18. What triggers EDD?

• PEPs and close associates
• High-risk countries/jurisdictions
• Adverse media
• Complex ownership structures
• Unusual or unclear source of funds/wealth
• High-risk industries (depending on policy)

19. What documents are needed for EDD?

• Source of Funds (SoF)
• Source of Wealth (SoW)
• Ownership structure chart
• Business registration and financials
• Tax returns / bank statements (as per policy)

20. What is Source of Funds vs Source of Wealth?

Source of Funds is where the specific money for a transaction comes from (e.g., salary, loan, savings). Source of Wealth is how the customer built their overall net worth over time (e.g., business profits, inheritance).

Corporate KYC & Ownership Questions

21. What is a UBO?

A UBO (Ultimate Beneficial Owner) is the natural person who ultimately owns or controls a company, commonly through a threshold such as 25% ownership or control (varies by policy/jurisdiction).

22. Why is UBO identification important?

Criminals often hide behind layered entities. Identifying the UBO ensures the institution knows who controls the business and reduces money laundering and sanctions evasion risk.

23. How do you handle complex ownership structures?

Map the structure, identify all controlling parties, verify shareholders and directors, review offshore links, request clarification for unclear layers, and escalate when transparency is insufficient.

Scenario-Based KYC Interview Questions

24. What will you do if a customer’s address and ID do not match?

Request additional or updated proof, verify using alternative evidence, document the resolution, and escalate if the mismatch cannot be reasonably explained.

25. A customer refuses to provide source of funds. What do you do?

Escalate. Refusing mandatory documentation is a major red flag. If the customer continues to refuse, onboarding cannot proceed under most compliance policies.

26. You find adverse media linking a customer to fraud. Next step?

Document findings, assess relevance and credibility, escalate to senior compliance/AML team, and do not clear the case without review and approvals.

27. Customer name partially matches a sanctioned individual. What do you check?

• Date of birth / incorporation date
• Nationality / country
• Aliases
• Address
• Additional identifiers

Role & Fit Questions

28. What is your understanding of the KYC Analyst role?

Collect and review documents, verify identity, run screening, assign risk rating, document decisions, escalate high-risk cases, and ensure onboarding follows policy and regulations.

29. Why should we hire you for a KYC role?

Focus on accuracy, attention to detail, strong documentation, analytical thinking, comfort with screening tools, and willingness to learn policies and regulations.