What is the process known as that involves verifying customer identities and assessing risks?

The term that describes the process of verifying customer identities and assessing risks is recognized as "Know Your Customer" or KYC. This process is a fundamental aspect of financial institutions and involves gathering and evaluating information about a customer to ensure they are who they claim to be and to assess their risk profile.

KYC includes measures such as checking identification documents, understanding the nature of a customer's business, and assessing their financial activities to comply with regulatory requirements and to mitigate risks related to money laundering and fraud.

The concept encompasses actions such as customer due diligence, which is a component of KYC focusing specifically on understanding the associated risks relative to the customer's profile. However, when addressing the verification of identities and risk assessment as a combined concept, KYC is the broader and more commonly used term in financial contexts.