KYC — Know Your Customer — is the identity verification component of customer due diligence. Before providing a designated service, a reporting entity must collect and verify a customer's identity: for individuals that typically means full name, date of birth and residential address verified against an authoritative data source; for entities it means verifying the legal entity itself and identifying its directors and beneficial owners. KYC can be done with physical documents, electronic verification against credit-bureau and government data, biometric face match, or an accredited Digital ID. KYC is the gateway to onboarding — it sits inside the broader CDD process which also covers purpose of the relationship, risk rating, ongoing monitoring and enhanced due diligence for higher-risk customers.
What KYC means in practice from 1 July 2026
Tranche 2 turns KYC from a financial-services concept into a day-to-day workflow for lawyers, accountants, real estate agents, conveyancers and bookkeepers. From 1 July 2026 you'll need to KYC every client receiving a designated service — and evidence it. Manual ID photocopies aren't enough; AUSTRAC expects verifiable, repeatable, auditable identity verification.
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