Customer identification programCIP

The written rules a US institution follows to identify customers.

When someone opens an account, the institution follows a documented procedure for what information to collect and how to check it.

The BSA-mandated program specifying identifying information collected and verification methods used. BSA is the Bank Secrecy Act, the foundational US anti-money-laundering law.

A customer identification program (CIP) is built around a few requirements:

• Collect identifying information, at minimum the customer's name, date of birth, address, and an identification number.
• Verify the identity, using documents, non-documentary methods such as records checks, or both.
• Keep records, including what was collected and how it was verified.
• Compare against government lists, to check whether the customer appears on lists of known or suspected terrorists or sanctioned parties.
• Notify customers, so they know the institution is asking for information to verify identity.

An institution applies a CIP when a customer opens a new account:

1. The customer provides the required details.
2. The institution verifies them within a reasonable time, using methods set out in its written program.
3. It records the information and the verification.
4. It decides whether to open the account, restrict it, or decline.

The requirement is specific to the United States, but many countries have equivalent rules under their own anti-money-laundering laws.

A CIP sits next to terms that are easy to mix up:

• Know your customer (KYC) is the broader duty, and the CIP is its identity-collection part.
• Customer due diligence (CDD) goes further by assessing the customer's risk and ongoing activity.
• Bank Secrecy Act (BSA) is the law that requires the program.