Digital onboarding is more than just the beginning of a connection. How it is done has an impact on how much time and money customers spend with you. As well as how much they like and trust you. The gathering and verification of necessary “know your customer” (KYC) data can be extremely difficult. For the financial services industry if cumbersome and inconsistent methods are use.
Customers encounter and evaluate all the attributes they value most during the onboarding process. Including convenience, personalization, the brand, security, and service. It’s the time when people realize that this is how things will be with this company. It is crucial to use efficient and effective methods to comply with KYC regulatory standards. If you want to stay competitive, avoid eliminating good or legal consumers. And take the necessary precautions to protect communities.
The requirements for KYC compliance are met through a variety of fragmented approaches. New clients exit apps in droves in favor of challenger banks or fintechs that provide a quicker. More seamless experience due to this fragmentation’s greater prices across services and poor user experience.
This reinforces the necessity to strike a balance between efforts by using the proper number of data compliance checks to authenticate clients without letting it turn into a time-consuming and burdensome task that raises abandonment rates. As we’ve seen in numerous widely publicised AML mistakes in prominent institutions, the consequences can be dramatic when this balance isn’t kept and banks get it wrong.
So, what exactly is KYC?
A bank uses the KYC compliance procedure to make sure it is aware of the customer’s identification.
These days, identity verification most likely entails establishing the customer’s identity through the use of identity documents and background information sources, as well as taking action to make sure the customer is indeed who they say they are. Onboarding for financial services involves performing KYC compliance, but it doesn’t end there. For the duration of the financial service in question, banks must make sure they “know” the consumer. For retail consumers, this entails identifying and verifying when a customer’s circumstances change, such as when they move. Changes in ownership and control are also included for commercial clients.
AML and Counter-Terrorist Financing (CTF) compliance also heavily relies on KYC. It serves as the base upon which the remainder of AML is constructed. You cannot determine whether there is a chance that you may facilitate criminal activity if you do not “know your customer.”
Regulators have been tightening the screws by enhancing KYC compliance standards for valid reasons. These conditions are necessary since more business has moved to digital media and they include
- Criminal Defense action
- Avoid fraud
- Defend society
Numerous pain points caused by changing criteria affect banks’ clients as well. While many of these pain points are cause by fragment services that result in complex workflows. And significant development costs, some of them are cause by manual processes that are still in use today. Now, selecting the best platform for identity verification is crucial. Document verification service is also use for this purpose.
KYC Frictionless Onboarding is Require
A crucial phase in your new clients’ customer journey is the initial onboarding procedure. Make sure your onboarding procedures are smooth to lower client attrition and raise retention. Due to the procedure taking too lengthy, about 39% of your clients would stop buying from you. Any slight annoyance or holdup during this phase, including delayed response times, incorrect negative verifications, or asking for excessive information, will put off your clients and cause a high customer attrition rate.
Management of Risk
By using the right KYC applications, fraud is reduce and risk is minimize. Organizations must be more attentive and take the necessary safeguards to safeguard their brand and business as fraud rates rise yearly. You may find any potentially dangerous consumers and make sure you comply with any regulatory obligations by putting in place a strong CDD (customer due-diligence) process.
Reduce costs and time
Your business will save time and money if you do away with manual processing of paper documentation and the requirement for in-person verification. By including your CDD into the onboarding procedure, you enable your customers to quickly and error-free authenticate their identity.
In order to combat any illicit actions through 2021, the rising growth of the digital transformation underscores the need for stronger digital identification solutions. The knowledgeable team at Data Zoo can complete KYC for numerous APAC nations in a matter of seconds. The national identity card, a proof of address, or a proof of income are the documents needed for KYC.