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Customer Identification Program (CIP)

A Customer Identification Program (CIP) is a requirement of the USA Patriot Act that prescribes the minimum financial institutions must do to “form a reasonable belief that it knows the true identity of each customer.”

According to the Federal Deposit Insurance Corporation (FDIC), the CIP Rule has six general requirements:

  1. A written program

  2. Four pieces of identifying information: customer name, date of birth, address, and identification number

  3. Identity verification procedures

  4. Recordkeeping

  5. Comparison with government lists

  6. Customer notice

Frequently asked questions

A Customer Identification Program (CIP) is part of customer due diligence (CDD) and focuses on the collection of key customer data used to verify identity.

Customer Identification Program (CIP) compliance is part of the larger customer due diligence (CDD), anti-money laundering (AML), and Know Your Customer (KYC) framework that helps businesses reduce the risk of financial fraud.

At a minimum, businesses must collect and verify four pieces of identifying information to satisfy CIP requirements: the individual’s name, date of birth, address, and identification number.

A CIP must include a written program, collection and verification of identifying information, recordkeeping, comparison with government lists, and customer notice.

There are two broad methods for customer identification program (CIP) verification:

  • Documentary: This method compares the information from documents such as driver’s licenses or passports against authoritative databases

  • Non-documentary: This method verifies PII against global issuing and other authoritative databases to ensure authenticity

Customer identification programs (CIPs) are part of Know Your Customer (KYC) regulations. KYC also usually involves Customer Due Diligence (CDD) and continuous monitoring.

Both CIP and CDD are essential functions of KYC. A customer identification program is a set of procedures a business must establish and follow to verify the identity of its customers or users. CDD, on the other hand, refers to specific processes designed to assess customer risk.