Ever since the crisis of 2008, financial and banking sectors have been dealing with many reforms, regulations and norms. Practices and applicable regulations may be country specific, but businesses have been forced to adopt fintech in some form or the other, and KYC has become mandatory for financial institutions. In this post, we take a look at KYC and how digitization can actually help businesses and customers alike.
What is KYC?
KYC stands for Know Your Customer. It is the standard compliance needs, which allows financial institutions and businesses in the financial sector to verify the identity of consumer. As a company, you are basically ensuring that the claims of the customer with regards to name, address and bank details are true, by verifying necessary documents. For the longest time, KYC was all about paper documents. This was an irritating process for consumers, and businesses had to spend considerable effort and time to ensure that the KYC compliance needs are met. With digital KYC, we finally have a better choice.
How beneficial is digital KYC and how does it work?
To start off, it is necessary to understand the basics of digital KYC. If you want to adopt the same, you have to get a digital KYC API, which will be integrated into your platform and app, and the API will leverage the bank account of the consumer to verify the necessary details. The process gets away with the need for physical documents, which not only reduces the effort required to procure these details, but at the same time, this also ensures that customers have a better onboarding experience. KYC was made mandatory because of the money laundering, corruption, and other concerns, and digitization ensures these aspects but through a much simpler process. For customers, brands that adopt digitization do mean more, which gives your business a competitive advantage.
Digital KYC is the future, and keeping FINTRAC / AML regulations in consideration, this is what every company should be looking it. Of course, the process of integration can take a bit of understanding, but you can expect to get significant support for that. The best Digital KYC APIs have 99% reliability, which ensures compliance and minimizes the risks related to handling of KYC information. Take your time to evaluate what digital KYC means for your company and don’t shy away from seeking consultation on how you can adopt the same.