Know Your Customer (KYC) and Customer Due Diligence

Course Code: FIN203 | Organization: Binarium Corp | Duration: Approximately 2 Hours | Language: English

KYC — Know Your Customer — is one of the most consequential compliance obligations facing Canadian financial services professionals today. It is the process through which regulated entities verify who their customers are, understand the nature of the business relationship, and assess the risk that the relationship may be exploited for money laundering, terrorist financing, or other financial crime. This is not an abstract regulatory checkbox: in 2022–2023, FINTRAC assessed over $9.5 million CAD in administrative monetary penalties against Canadian Reporting Entities — many attributable directly to deficient KYC practices.

FIN203 is a comprehensive, Canadian-focused training course that takes you from the legislative foundations of KYC through every practical step of the customer onboarding process — and the ongoing monitoring obligations that follow. Using real-world scenarios drawn from Canadian regulatory enforcement cases, FINTRAC guidance, and FATF typologies, this course equips financial professionals with the knowledge and judgment to implement KYC correctly in a complex, risk-based regulatory environment.

What You Will Learn

This course is structured across six chapters covering the full scope of KYC and Customer Due Diligence in the Canadian context:

• Chapter 1 — KYC Foundations: The legislative basis for KYC under the PCMLTFA; who is a Reporting Entity and why it matters; the three pillars of KYC (Identify, Verify, Monitor); Canada's regulatory ecosystem (FINTRAC, OSFI, PCMLTFA, FATF); and the real financial and reputational consequences of KYC failures. Introduction to identity verification methods for individuals, including government-issued photo ID, dual-process method, credit file method, and the digital/video verification methods approved by FINTRAC in 2021.
• Chapter 2 — Entity KYC and Beneficial Ownership: The expanded requirements for entity customers — corporations, partnerships, trusts, and other legal arrangements; the 25% threshold for beneficial ownership identification; use of the Corporations Canada ISC register and provincial equivalents; trust deed analysis and identification of trustees, settlors, and beneficiaries; nominees and the piercing of nominee ownership structures.
• Chapter 3 — Risk Assessment and High-Risk Categories: The FATF Risk-Based Approach and its PCMLTFA implementation; the three-step RBA process (Identify, Assess, Mitigate); risk dimensions — geography, customer type, products/services, delivery channel; risk tier assignment (Low, Medium, High); Politically Exposed Persons (PEPs) and Heads of International Organizations (HIOs) — definitions, domestic vs. foreign, the five-year lookback rule, and mandatory EDD obligations; high-risk industries including MSBs, casinos, real estate, precious metals, VASPs, and nonprofit organizations.
• Chapter 4 — Sanctions Screening: Canada's parallel sanctions framework — PCMLTFA and SEMA; the OSFI Consolidated List, Global Affairs Canada SEMA/JCPA lists, and the UNSC Consolidated List; OFAC SDN list exposure for entities with US operations; the sanctions screening process at onboarding — fuzzy matching, adjudication of hits, true match response, and the no-tipping-off obligation; ongoing batch screening obligations and list update management.
• Chapter 5 — Ongoing Monitoring: The difference between periodic reviews and trigger-event reviews; risk-tiered review frequencies (Low: 3 years; Medium: 2 years; High: annually); ten categories of trigger events and the mandatory response protocol; transaction monitoring integration with KYC — how the onboarding profile feeds alert thresholds; STR obligations and the 30-day filing deadline; updating KYC information for customer-initiated changes including name changes, address changes, and beneficial ownership changes; the 5-year record retention requirement under PCMLTFA s.6.
• Chapter 6 — Practical Onboarding: Four individual customer onboarding walkthroughs (domestic employed individual, foreign national, family trust, and domestic PEP); a full corporate customer onboarding walkthrough (private Ontario corporation, two beneficial owners, trade finance and wire transfer products); handling incomplete documentation (grace period policy), inconsistent documentation (quality concerns and suspected fraud), and customer refusal scenarios; the non-account decision and its documentation requirements; when a declined onboarding can itself trigger an STR obligation.

Learning Objectives

Upon completing this course, you will be able to:

1. Identify the legal basis for KYC obligations under the PCMLTFA and apply the correct identity verification method to individual and entity customers based on the circumstances of each onboarding situation
2. Identify all beneficial owners of corporate, trust, and partnership customers at the 25% threshold, using the CBCA ISC register and provincial equivalents as corroboration sources
3. Apply the Risk-Based Approach to assign a risk tier (Low, Medium, or High) to any customer, document the rationale, and determine whether standard CDD or Enhanced Due Diligence applies
4. Identify PEPs, HIOs, and their family members and close associates; apply the mandatory EDD obligations under PCMLTFA Regulations s.69; and conduct a compliant PEP screening process using both database screening and direct inquiry
5. Conduct sanctions screening against all applicable Canadian and international lists at onboarding and on an ongoing basis; adjudicate fuzzy match results; and respond correctly to a true match — including the no-tipping-off obligation under PCMLTFA s.8 and SEMA

Who This Course Is For

FIN203 is designed for professionals who interact with customer KYC processes in any capacity — not only compliance specialists. The course is appropriate for:

• Branch staff, relationship managers, and account opening officers at banks, credit unions, and trust companies
• Compliance analysts and AML officers who review and approve customer onboarding packages
• Money services business (MSB) staff — including currency exchange, funds transfer, and crypto operators — who face the same KYC obligations as traditional financial institutions
• Real estate agents, brokers, and legal/accounting professionals now subject to expanded PCMLTFA obligations under the 2024 amendments
• Technology and managed service professionals (including Binarium Corp employees) who design, build, or support KYC/AML compliance systems and workflows for regulated clients
• Senior managers and directors who must understand their personal liability exposure for KYC compliance deficiencies under PCMLTFA s.73.11

No prior compliance or legal training is required. The course is written in accessible language with Canadian regulatory context throughout.

Prerequisites

No formal prerequisites. This course is designed to be accessible to staff at all levels. Familiarity with basic Canadian financial services terminology (e.g., accounts, wire transfers, mortgages) will be helpful but is not required. Learners who have completed FIN201 (AML Compliance) or FIN202 (Financial Fraud Prevention) will find that FIN203 extends and deepens the compliance framework introduced in those courses — but FIN203 can also be taken first or independently.

Duration

Approximately 2 hours of instructional content across six chapters. Each chapter includes explanatory text, regulatory references, worked examples, scenario walkthroughs, and a graded knowledge check. The final assessment takes an additional 30 minutes. Most learners complete the full course — including the final assessment — in approximately 2.5 hours.

Grading and Certificate

This course uses a weighted grading model:

• Knowledge Checks (30%): Six graded knowledge checks — one at the end of each chapter. Each check includes 4–6 questions drawn from the chapter content. Two attempts are permitted per knowledge check; the higher score is used. Correct answers are displayed after completion.
• Final Assessment (70%): A 20-question final examination covering all six chapters, with a 30-minute time limit. One attempt only. The final assessment includes scenario-based questions that require applying KYC rules to realistic situations — not just definitional recall.
• Passing Grade: 70%

Learners who achieve a passing weighted grade will receive the Certificate in Know Your Customer (KYC) and Customer Due Diligence, issued by Binarium Corp. The certificate is available for download as a PDF and for LinkedIn sharing immediately upon achieving the passing score. Certificates include a unique verification code for employer or regulatory confirmation purposes.

Recommended Next Courses

• FIN201 — AML Compliance: Foundations and Reporting — Extends your KYC foundation into the complete AML compliance program: suspicious transaction reporting, large cash transaction reporting, terrorist property reporting, and FINTRAC examination preparation
• FIN202 — Financial Fraud Prevention — Covers fraud typologies that intersect with KYC: identity fraud, account takeover, wire fraud, cheque fraud, investment fraud, and elder financial abuse — with practical detection and prevention techniques

Binarium Corp | Managed IT & Compliance Services | Canada
Training Support: training@binarium.ca | Helpdesk: 1-855-274-6899 | compliance@binarium.ca