• It all stems from a succession of new regulations to combat money laundering and terrorism. Laws such as Bank Secrecy Act, anti-money laundering acts, and Patriot Act are enacted for this purpose. Gradually cumbersome requirements are placed upon financial institutions to make sure they do not break the law unwittingly.
• Eventually all banks have adopted the policy of KYC, or even KYCC and KYB. KYC refers to know your customer; KYCC refers to know your customer’s customer; KYB refers to know your business. It all comes down to conforming the customer identification program (CIP)

References:
https://www.fincen.gov/sites/default/files/2018-04/FinCEN_Guidance_CDD_FAQ_FINAL_508_2.pdf
https://en.wikipedia.org/wiki/Customer_Identification_Program
https://en.wikipedia.org/wiki/Patriot_Act#Title_III:_Anti-money-laundering_to_prevent_terrorism
https://en.wikipedia.org/wiki/Know_your_customer#KYCC