Corporate KYC (Know Your Customer), also called Corporate CDD (Customer Due Diligence), is the process of verifying businesses, identifying their ownership and control structures, and assessing risks related to money laundering, terrorist financing, sanctions and other financial crimes.
These questions are useful for interviews for these roles in banks and financial institutions:
- Corporate KYC Analyst
- CDD Analyst
- EDD Analyst
- AML Analyst
- KYC Quality Analyst
- Client Onboarding Analyst
Preparing for a general AML/KYC interview too? See 35 AML KYC Interview Questions and Answers.
Basic Corporate KYC Questions
Q1-10Q1What is Corporate KYC?
Corporate KYC is the process of identifying and verifying a legal entity, understanding its ownership and control structure, identifying its ultimate beneficial owners (UBOs), and assessing the financial crime risks associated with the business relationship.
Q2What is the difference between Individual KYC and Corporate KYC?
| Individual KYC | Corporate KYC |
|---|---|
| Verifies a natural person | Verifies a legal entity |
| Focuses on personal identity | Focuses on business identity and structure |
| Checks personal ID and address | Checks incorporation, registration, ownership and control |
| Usually simpler ownership analysis | May involve complex ownership layers and UBO identification |
Q3What documents are required for Corporate KYC?
Common documents include:
- Certificate of IncorporationProves the company legally exists
- MOA / AOAMemorandum and Articles of Association, or equivalents
- Business registration extractCurrent details from the company registry
- Ownership structureShareholding chart across all layers
- Register of directorsWho manages the company
- Register of shareholdersWho holds the shares
- UBO declarationWho ultimately owns or controls it
- ID of relevant individualsDirectors, UBOs and signatories
- Address proofRegistered or operating address, where required
Q4What is a UBO (Ultimate Beneficial Owner)?
A UBO is a natural person who ultimately owns or controls a legal entity, directly or indirectly.
A commonly used ownership threshold is 25%, although the applicable threshold and control tests depend on local regulations and bank policy.
Q5What is the difference between a shareholder and a UBO?
A shareholder is a person or entity that holds shares in a company. A UBO is the natural person who ultimately owns or controls the entity.
50% × 80% = 40%
Company A is the shareholder. The individual is the natural person behind it.
Q6What is CDD?
Customer Due Diligence is the process of identifying and verifying a customer, understanding the nature and purpose of the business relationship, identifying beneficial owners, assessing risk, and conducting ongoing monitoring.
Q7What is EDD?
Enhanced Due Diligence involves additional checks for higher-risk customers, such as those with complex ownership structures, relevant high-risk geographic exposure, unusual transactions, or significant adverse information.
EDD may involve additional source-of-wealth or source-of-funds checks, deeper ownership investigations and enhanced monitoring.
Q8What is the difference between CDD and EDD?
| CDD | EDD |
|---|---|
| Standard risk-based due diligence | Additional measures for higher-risk relationships |
| Establishes identity, ownership and purpose | Involves deeper verification and investigation |
| Standard ongoing monitoring | More intensive monitoring where required |
| Applied as part of normal onboarding | Triggered by elevated risks or regulatory requirements |
Q9What is a PEP?
A Politically Exposed Person is an individual entrusted with a prominent public function, such as a senior politician, high-ranking government official or senior judicial official.
Depending on applicable regulations, family members and close associates can also be relevant to PEP screening and risk assessment.
Q10What is sanctions screening?
Sanctions screening is the process of checking customers, UBOs and other relevant parties against applicable sanctions lists, such as OFAC, the UN, EU and UK lists.
Its purpose is to identify prohibited or restricted relationships and transactions under applicable sanctions requirements.
Intermediate Corporate KYC Questions
Q11-20Q11How do you calculate indirect ownership?
Multiply the ownership percentages across each layer.
60% × 70% = 42%
Q12What is a shell company?
A shell company is a legally incorporated entity with little or no independent business operations.
Q13What is adverse media screening?
Adverse media screening involves reviewing credible negative information about a company or associated individuals.
This includes allegations of:
- Fraud
- Corruption
- Money laundering
- Sanctions evasion
- Other relevant misconduct
Q14What is the difference between Source of Funds and Source of Wealth?
| Source of Funds (SOF) | Source of Wealth (SOW) |
|---|---|
| Where the money involved in a particular transaction or relationship comes from | How a customer accumulated their overall wealth |
| Example: money transferred from a business bank account | Example: profits earned from operating that business |
Q15What factors determine a corporate customer's risk rating?
Common factors include:
- IndustryThe customer's line of business
- GeographyCountries where it operates
- OwnershipHow complex the structure is
- PEP exposureAmong owners and controllers
- Sanctions riskParties, countries and trade
- Expected activityTransaction volume and type
- Products usedServices the customer needs
- Adverse informationCredible negative news
Q16What is periodic KYC review?
Periodic KYC review is the reassessment of a customer's identification information, ownership structure, business activity, risk rating and screening results.
Review frequencies are determined by applicable regulatory requirements and internal policies.
Q17What is a trigger event in Corporate KYC?
A trigger event is a significant change that requires reassessing customer information or financial crime risk.
Examples include:
- Change in ownership
- New directors
- Expansion into higher-risk jurisdictions
- Material adverse media
- Unusual activity
Q18What is the difference between a director, shareholder, authorised signatory and UBO?
| Role | What it means |
|---|---|
| Director | Manages or oversees the company |
| Shareholder | Owns shares |
| Authorised signatory | Permitted to act on behalf of the company within their authority |
| UBO | The natural person who ultimately owns or controls it |
Q19What is a complex ownership structure?
A complex ownership structure involves multiple layers of legal entities, holding companies, trusts, or entities incorporated in different jurisdictions. The analyst must trace the ownership and control relationships to identify the relevant natural persons.
Q20What happens when a company does not provide sufficient KYC documents?
"I would identify the outstanding requirements, request clarification or supporting evidence, and escalate unresolved deficiencies according to policy. I would not approve onboarding until the required due diligence is completed or an explicitly permitted exception is authorised."
Scenario-Based Interview Questions
Q21-30These questions matter most for candidates with practical Corporate KYC experience.
Q21A company has five shareholders, each holding 20%. Who is the UBO?
"I would first check the applicable ownership threshold and regulatory definition. If no shareholder meets the relevant ownership threshold, I would investigate whether any individual exercises control through voting arrangements, agreements or other means.
Where required, and after taking reasonable steps to identify a beneficial owner, I would record the appropriate senior managing official under the applicable rules."
Q22What would you do if a UBO matches a sanctions list?
"I would assess whether the match is genuine by comparing available identifiers, such as full name, date of birth, nationality and other relevant information. If the match cannot be cleared, I would escalate it immediately to the sanctions or compliance team and follow applicable restrictions."
Q23How would you handle a customer with negative news about fraud?
"I would assess the credibility, relevance, severity and recency of the allegations, confirm whether they concern the correct entity or individual, and document the findings. Based on the risk assessment, I would recommend additional due diligence or escalation."
Q24What would you do if ownership information differs between the company registry and the customer's declaration?
"I would compare the effective dates, check for recent share transfers, request updated supporting evidence and reconcile the discrepancy. If the information cannot be verified, I would escalate the case rather than assume one source is correct."
Q25How would you conduct KYC on a company with multiple ownership layers?
"I would map each ownership layer, verify the relevant entities using reliable records, calculate indirect ownership, identify natural persons exercising ultimate control, and complete the required screenings. I would document both the structure and the evidence used."
Q26A corporate customer is incorporated in one country but operates in several others. How do you assess the risk?
"I would evaluate the country of incorporation, actual operating locations, principal customers and suppliers, transaction corridors, sanctions exposure and relevant geographic risks."
Q27A customer's UBO changes during an existing banking relationship. What would you do?
"I would obtain the updated ownership information, verify the new UBO, perform the required screening, reassess the customer's risk rating, update the KYC records, and seek approvals where necessary."
Q28How do you handle a false-positive PEP or sanctions alert?
"I would compare reliable identifying information, document why the alert does not relate to the screened party, and clear it only within my delegated authority and the institution's procedures."
Q29What would you do if a relationship manager requests urgent onboarding despite incomplete KYC?
"I would explain the outstanding requirements, prioritise obtaining the missing information, and follow the approved escalation or exception process."
Q30Can you explain the end-to-end Corporate KYC onboarding process?
- Collect"First, I collect the company's basic information and required documents."
- Verify"Next, I verify its legal existence and understand its business activities and intended banking relationship."
- Identify owners"I then identify the ownership and control structure, calculate direct and indirect ownership, and identify the ultimate beneficial owners."
- Screen and assess"After that, I conduct sanctions, PEP and adverse media screening, assess the customer's risk based on relevant factors, and perform enhanced due diligence where necessary."
- Document and approve"Finally, I document my findings, resolve discrepancies, obtain required approvals, and complete onboarding according to the bank's procedures."
This process reflects core areas covered by FATF beneficial ownership guidance and Wolfsberg due diligence practices.1,2
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Sources
Sample answers are for practice. Ownership thresholds, document lists and review rules depend on the jurisdiction and the institution.
- FATF Recommendations: Recommendation 10 (customer due diligence), 12 (politically exposed persons) and 24 (beneficial ownership of legal persons)
- The Wolfsberg Group: due diligence guidance and FAQs