Did they mean that once you obtained banking in one false name you could use that to pass KYC with other facilities?

I thought maybe it's something like that, but that's still not KYC. Or maybe it's software engineer's "know-your-client" in a way, where if you have a consistent internal ID for the client that's enough. :D

But does anyone really "know" their customer?

I wonder how far you could get, if they provide a bank like statement you might be able to get phone servce / utilities (in parts of the world where your SS number isnt your password). Likely never able to get an actual bank account through however.

I am not too aware how it is in the U.S. In continental Europe you usually need to provide verifiable form of official identification, like a driver's license, a national ID card, a passport, or any of that in digital form (like the Estonian ID program for example). I never got this thing with utility bills.

The point here is to prevent money laundering and KYC is one instrument out of many for this.

Now come to think of it, in Germany for example, if it can be shown that if a bank employee, even after a good KYC had reasons to doubt that the account holder is the ultimate recipient of the funds or if the client is involved in money laundering, they might be personally criminally liable. Wonder how that is in the U.S.