Beneficiary

A beneficiary is an individual or entity designated to receive funds that are collected, managed, or disbursed by a third party. This term is commonly used in financial contexts where transactions involve the transfer of money or benefits from one party to another, often through intermediaries. In scenarios where an account is set up by one person for the benefit of another, the beneficiary is the ultimate recipient of the funds.

For the funds to be settled directly to the beneficiary, financial institutions require that the account be configured to pass comprehensive Know Your Customer (KYC) checks. This involves verifying the identity of the beneficiary and confirming their bank details to ensure compliance with anti-money laundering regulations and to safeguard against fraud. The process helps in maintaining the integrity of financial transactions and ensures that funds are transferred securely and accurately to the intended recipient. Establishing clear beneficiary information is crucial for effective and lawful management of funds, particularly in cases involving trusts, insurance, banking, or inheritance.