FinTech Glossary

What Is Know Your Product

Know Your Product (KYP) is a compliance and governance practice that requires financial institutions to fully understand, document, and monitor the features, risks, pricing, and suitability of the products they offer.

Understanding KYP

KYP ensures that financial products are designed, distributed, and managed responsibly.

It focuses on understanding how a product works, who it is suitable for, and what risks it may pose to customers or the institution.

KYP is especially relevant in regulated environments where product misuse or mis-selling can lead to compliance failures.

How Know Your Product Works

Organisations assess each product’s structure, intended use, pricing model, and risk profile. This includes documenting features, limitations, target customer segments, and regulatory obligations.

Products are periodically reviewed to ensure they remain compliant and appropriate as regulations or usage patterns evolve.