How the COVID-19 Pandemic Makes KYC Interesting?
KYC method is a provocative concept for online companies. On the other hand, the procedure KYC, simply put, Know Your Customer, is compulsory for several online companies to authenticate the identity of their customers before having any sort of company relations with them. Therefore, knowing your customer or simpler methods to authenticate customers’ identities may affect drastically conversion and therefore on the fee or capitalization. This is why finding the perfect balance between knowing your customer compliance and required friction is ought to be a major challenge. Cryptocurrency, digital wallets, initial coin offerings, and even financing institutions have to ensure that they have verified comprehensive information about their clients - they are not included with bribery, fraudulent activity, or money laundering.
How to Find the Perfect Balance
Digitization and techniques for quick, precise, and compliant know your customer is becoming more and more vital globally. Businesses need a complicated solution with a mixture of technologies and diversity of information, since bribery, terrorism financing, and fraudulent activity are going to be severe concerns for national and international business. Perfect KYC devices assist companies to guard their repute and money. In order to guard it, the solution requires making sure that the business is dealing legitimately with genuine partners, and the perfect know your customer solution also makes the procedure simpler for clients and for the companies themself.
Many monetary, gaming, telecommunication, and blockchain companies adopt digital know your customer websites that are gathering basic information and data about the users, preferably with a pre-installed IDV mechanism.
What Know Your Customer Compliance Must Include
Customer recognition should involve saving initials, SSN, date of birth, and residential data - all these require assistance to comprehend whether a client was included in malicious activity or not. When basic data is already in your database, you know your customer or information provider should pair it with the records of people or companies that are related to bribery or crime, being under global watchlists, or included in malicious activity plans.
Lists of PEP are also significant to examine, particularly for monetary institutions.
Then your information or know your customer provider should examine, how much is the risk they have dealt with a specific customer- how much is possible involvement with the corruption or illegitimate activities. With all of these techniques, a business can develop its conclusion of an upcoming risk related to the customer’s account. Another required mechanism - continuous monitoring, which continuously overlooks the customer’s account activity and recognizes if something unusual happens. A similar process with a client’s peers also assists monetary institutions. Customers with a very similar background and company fields, which also associate respectively, can be similar in other aspects.
KYC and the Customer Experience
Developing technologies for online IDV is important since knowing your customer adds friction to the user onboarding procedure as a client goes through required IDV steps. Long queue times are costly for the banking sector and annoy the users who expect fast and simple interactions. A study conducted by Signicat found that more than 45 percent of physical banking users in Europe left their effort to sign up for the latest monetary services. The main cause of this? The procedure simply was too time-taking and was cumbersome.
The problem that each company encounters, therefore, is how to evaluate and know your customer with the desire for a quick, effective onboarding procedure that provides a positive user experience.
What should you consider in Know Your Customer?
- Simple know your customer flow for both - business and clients
- Time and cost-efficient.
- The speed - no matter if your financial institution or an initial coin offering, knows your customer compliance should be quick as just opening the latest application.
- Regulatory authorities approvement and compliance with AML and KYC law expertise
- Data safety ( involving general data protection regulatory compliance)
- KYC will assist you to comply with KYC and AML laws.
To safely meet these economic objectives, the perfect know your customer solution must be scalable for businesses with a global presence or international ambitions. This implies, for instance, that KYC measures can assist a wide range of identity documents, dependent on where the corporation does business. Furthermore, the solutions need to be efficient, both in terms of their cost-efficient and their capability to develop a positive user onboarding occurrence.