Contents

• Reasons Why One Should Invest in KYC Companies?
• Challenges Faced By KYC Companies in 2023
• Fraud & Money Laundering Cases of 2023
• IDMERIT: A Trusted and Reliable KYC Solution Provider
• Conclusion

Businesses must remain informed about the top KYC companies since they are concerned about complying with regulatory standards and protecting themselves from identity fraud. These companies also offer document verification, transaction monitoring, and customer due diligence solutions, helping Banks, Cryptocurrency industries, Healthcare sector, Insurance sectors and
Fintech companies fight financial crime.

Reasons Why One Should Invest in KYC Companies?

1. Verifying User Identities- KYC systems are ubiquitous in the financial industry as a crucial tool for verifying user identities.
2. Combating Money Laundering- KYC verification companies provide robust KYC solutions to safeguard user privacy, combat money laundering, and eradicate financial fraud.
3. Specialised KYC Providers- Specialised KYC providers develop innovative solutions to enhance the comprehensiveness and accuracy of user identification processes.
4. Regulatory Compliance Assurance- KYC companies ensure businesses comply with evolving regulatory standards, reducing legal risks and financial penalties by helping enterprises navigate complex compliance requirements.
5. Risk Mitigation and Enhanced Due Diligence- KYC companies conduct thorough background checks and due diligence on individuals and businesses.
6. Customer Trust and Reputation Building- Implementing KYC measures demonstrates customer security and privacy commitment. This, in turn, fosters trust among clients and contributes to the overall positive reputation of a business.

Challenges Faced By KYC Companies in 2023

As the digital realm expands, seamless integration with various systems and databases becomes increasingly critical, adding another layer of complexity for KYC companies. In 2023, KYC companies faced many challenges as they navigate the evolving landscape of identity verification.

• One significant hurdle is the constantly changing regulatory environment, with governments worldwide tightening their grip on digital transactions to combat financial crimes.
• Staying abreast of these regulatory shifts and ensuring compliance with the latest standards requires KYC companies to be agile and adaptive.
• Moreover, the rapid advancements in technology pose another challenge, as cybercriminals continually develop more sophisticated methods of identity fraud.

KYC providers must invest in innovative solutions to stay ahead of these malicious actors and safeguard sensitive information effectively. The challenges KYC companies face in 2023 underscore the industry’s dynamic nature, requiring constant innovation and adaptability to address regulatory, technological, and operational complexities.

Fraud & Money Laundering Cases of 2023

Several fundamental changes and updates were made to KYC regulations in 2023, including an increased focus on digital identity verification. As more businesses moved online, KYC regulations evolved to incorporate methods for verifying digital identities, including biometric authentication or blockchain-based methods.

Here are some stats that show the current situation of fraud and money laundering in the country:

• Money laundering plays a pivotal role in various criminal operations; it remains a persistent challenge impacting global economies significantly. The annual estimate of laundered money is nearly 5% of the worldwide GDP, totaling an astonishing $800 billion.
• A case in point is HSBC, an international bank that faced an $85 million fine due to its failure to uphold proper records as part of its AML measures, resulting in a lapse in filing suspicious activity reports (SARs).
• Liberty Reserve, a Costa Rican cryptocurrency platform, was implicated in $6 billion worth of suspected money laundering activities, posing a threat to early cryptocurrency enthusiasts.

IDMERIT: A Trusted and Reliable KYC Solution Provider

IDMERIT stands out as a trusted and reliable solution provider in KYC services. Offering a comprehensive suite of solutions, IDMERIT has established itself as a go-to resource for businesses seeking robust identity verification services. As a leader in KYC services, IDMERIT stands out as a trustworthy and reliable solution provider. With its comprehensive solution suite, IDMERIT is the first choice for businesses seeking robust identity verification services. IDMkyc provides KYC solutions that ensure a thorough and secure verification process.

Enhanced AML protection is made possible by IDMaml, which extends the platform’s capabilities. IDMscan, the flagship product of IDMERIT, offers accurate and efficient ID verification with the help of advanced scanning technology. Its video KYC solution, IDMlive, which incorporates live interactions to enhance the verification process, further demonstrates the company’s commitment to innovation. Despite today’s complexities of identity verification, IDMERIT remains a trusted partner for businesses.

Below are few more KYC companies that are reliable for users in 2023:

KYC Germany: KYC Germany is a trusted provider of robust identity verification solutions, focusing more on video KYC and aligning with the regulatory standards set by BaFin in Germany. Recognized for compliance and innovation, it significantly contributes to the evolving identity verification landscape.

KYC Spain: KYC Spain, a trusted and reliable KYC service provider in Spain, is a top choice for businesses seeking secure transactions in 2023, renowned for its robust solutions and reliable services.

KYC UK: KYC UK is a leading provider of identity verification services. It assists UK businesses in facilitating seamless customer onboarding and ensuring reliability in the complexities of identity verification, making it a trusted ally in 2023.

KYC Sweden: KYC Sweden is a trusted provider of KYC solutions, specialising in robust identity verification processes for businesses and financial institutions, ensuring secure customer onboarding and digital compliance in 2023.

Conclusion

In conclusion, as the digital landscape evolves, KYC companies are at the forefront of ensuring secure and compliant online transactions. IDMERIT and other industry leaders exemplify the commitment to innovation and reliability in the face of evolving challenges, making them indispensable partners for businesses navigating the complexities of identity verification in 2023.

The post How to Find the Right KYC Company For Your Organisation? appeared first on IDMERIT.

CONTENTS

• What are the challenges faced by crypto exchanges without KYC?
• The KYC Landscape in Crypto Exchanges
• KYC Builds Trust and Lowers the Risk of Transparency
• Benefits of KYC in Crypto Exchanges
• Overview of Crypto Exchanges in 2023
• The Role of KYC Solution Providers in Securing Crypto Exchanges
• Unlocking Efficiency with IDMERIT

What are the Challenges Faced by Crypto Exchanges Without KYC?

Before the widespread adoption of KYC in the cryptocurrency industry, there were several challenges:

1. Possibility of increasing Fraud: Cryptocurrencies, in their early days, offered a high degree of anonymity. While this was seen as a benefit by many, it also attracted individuals involved in illegal activities such as money laundering and fraud.
2. Reputation Risks: The association of cryptocurrencies with illegal activities tarnished their reputation. Trust and acceptance in the broader financial ecosystem were hindered, slowing down mainstream adoption.
3. Financial Risks: Without robust KYC solutions, financial risks and scams increase. Financial criminals who wanted to commit fraud were often attracted to crypto exchanges with no transparency or accountability. This led to financial losses.
4. Security Threats: The absence of KYC measures has made cryptocurrency exchanges more susceptible to hacking and cyber threats. These vulnerabilities resulted in significant losses for both users and platforms.

The KYC Landscape in Crypto Exchanges

KYC in crypto exchanges refers to the process of verifying the identity of users. It’s a robust mechanism that helps crypto platforms establish the real-world identities of their customers. The primary goal is to prevent fraudulent activities and to create a secure environment for trading digital assets.

To implement KYC effectively, crypto exchanges often turn to KYC solution providers. These solution providers offer a suite of services tailored to the unique needs of the cryptocurrency industry. By collaborating with these experts, crypto exchanges can streamline the onboarding process, enhance security, and reduce the risk with financial regulations. Below is how KYC solutions unlock the power in crypto exchanges:

1. User Verification: KYC solution providers use a variety of methods, including document verification and facial recognition, to ensure users are who they claim to be.
2. Risk Mitigation: By assessing user-profiles and tracking their activities, KYC solutions help exchanges identify high-risk individuals or entities. This proactive approach reduces the potential for financial crimes.
3. Enhanced Security: By implementing robust identity verification, crypto exchanges protect themselves and their users from security breaches and unauthorised access.

KYC Builds Trust and Lowers the Risk of Transparency

Financial misconduct, spanning a spectrum of illicit activities such as tax evasion, bribery, graft, financing of terrorism, and cyber intrusions into online banking systems, imposes an annual financial burden of approximately $1.4 to $3.5 trillion globally, with an estimated $2 trillion channelled through the laundering process.

Notably, crypto exchanges stand as susceptible targets, experiencing losses amounting to $4.26 billion in 2019 alone. The integration of Know Your Customer protocols within the realm of cryptocurrency and crypto exchange platforms can play a pivotal role in the identification and authentication of users, thereby diminishing the risk of financial crime and unauthorised operations.

Benefits of KYC in Crypto Exchanges

Implementing KYC solutions in crypto exchanges brings a multitude of benefits. These include:

1. Enhanced Trust: Users are more likely to trust and engage with exchanges that prioritise security and trust. KYC solutions make the decision-making process easy on the basis of identity verification.
2. Reduced Fraud: KYC solutions act as a deterrent to fraudsters and significantly reduce the incidence of fraudulent activities.
3. Combating Money Laundering: KYC & AML solutions help crypto exchanges avoid hefty fines and reputational damage. These solutions help in recognizing people involved in money laundering and terrorism financing.
4. Reduced Operational Costs: Automated KYC processes streamline user onboarding and reduce the need for manual verifications, cutting operational costs.
5. Global Expansion: Crypto Exchanges that prioritise KYC can expand to more countries by demonstrating a commitment to international regulations.

Overview of Crypto Exchanges in 2023

In 2023, cryptocurrency prices demonstrated remarkable resilience, especially considering that both Bitcoin and Ethereum had their worst annual performances in 2018. Despite a relatively unexciting performance in September, Bitcoin prices have surged by 63.3% year-to-date, while Ethereum prices have increased by 40.2%.

According to the most recent research conducted by Coinfirm, it has come to light that 69% of the 216 crypto-related businesses under scrutiny do not possess “comprehensive and transparent” KYC solutions, a critical component of their AML initiatives.

A separate report from CipherTrace further underscores this concern, indicating that among the top 120 crypto exchanges, one-third exhibit subpar KYC processes, and two-thirds are deficient in maintaining robust KYC policies.

The Role of KYC Solution Providers in Securing Crypto Exchanges

KYC solution providers help to authenticate business identities for crypto industries. They offer a range of services that encompass identity verification. The following identity verification methods are essential for crypto exchanges to stay secure and stable:

1. Document Verification: KYC solution providers enable exchanges to verify the authenticity of identity documents, such as passports and driver’s licences.
2. Biometric Authentication: Facial recognition technology ensures that the person submitting the documents is the same as the one in the ID.
3. Watchlist Screening: KYC solution providers allow exchanges to check users against global watchlists, identifying politically exposed persons (PEPs) and other high-risk individuals.
4. Ongoing Monitoring: Regularly updated profiles and transaction monitoring help exchanges identify changes in user behaviour that may indicate illicit activities.

Unlocking Efficiency with IDMERIT

There are several key strategies through which a crypto management platform can enhance security:

• Advanced identity verification
• Efficient onboarding process
• Ongoing monitoring
• Risk assessment tools

IDMERIT provides robust identity verification and Know Your Customer solutions. After harnessing these identity verification solutions, you’ll be able to manage custom workflows tailored to different usage scenarios and incorporate a range of verification methods to align with KYC methods. As a result, we not only guide in maximising conversion rate but also significantly enhance the efficiency of the verification pipeline.

If you’re interested in discovering how IDMERIT can assist you in achieving identity trust and security for your cryptocurrency exchange, please don’t hesitate to get in touch with us or join our community for a direct conversation with our product team. We’re here to engage in a discussion with you!

The post A Comprehensive Guide of KYC in Crypto Exchanges in 2023 appeared first on IDMERIT.

This blog helps to identify that many leading identity verification providers have now started offering Video KYC solutions, making it easier for businesses to onboard customers securely and efficiently.

CONTENT

• What is KYC? How does it help in Reducing Fraud and Authenticating a Customer’s ID document?
• What is video KYC?
• How did Video KYC replace traditional KYC methods in identifying a user’s identity?
• What are the benefits of Video KYC?
• Importance of Video KYC in Different Countries
• Conclusion
• More About Us

What is KYC? How does it help in Reducing Fraud and Authenticating a Customer’s ID document?

Know Your Customer (KYC) is an identity verification process used by businesses and financial institutions to verify the identities of their clients. KYC has become a powerful tool for industries to protect themselves and their clients from the ever-evolving landscape of fraud and risk.

The main aim of KYC is not only to prevent fraud but also to authenticate user’s identities to ensure that they are who they claim to be. It also helps in complying with regulatory requirements and safeguarding sensitive customer data.

Our robust identity verification solutions can help financial institutions and businesses effectively reduce the risk linked to fraudulent activities. These solutions incorporate cutting-edge technologies like face recognition, document scanning, and biometrics to guarantee the precision and authenticity of the user’s identity.

The KYC process works by collecting and verifying essential information from individuals to confirm their identity and make sure they are who they say they are. This typically includes personal details such as name, address, date of birth and often involves document verification, like passport and driver’s licence.

What is video KYC?

In this advanced world, digital KYC has become paramount. Video KYC, or Video Know Your Customer, is an advanced form of KYC that is used for verifying a user’s identity remotely through a Video call. Video KYC solution providers offer video KYC solutions to verify customers’ identities by checking their documents and matching them with their real-time appearance.

These solutions involve a live video call between an agent and a client. The purpose of this live video call is to verify identities, which reduces the risk of fraud and enhances customer convenience and security. The agent on the other side of the video call verifies the user’s identity by verifying their details and matching them with their real-time appearance.

Video KYC has now been adopted by several industries, including Banking and Finance, the Cryptocurrency exchange industry, fintech companies, Education, Healthcare, as well as the Insurance sector. Additionally, businesses can integrate Video KYC into their systems through Video KYC APIs, making the process even more streamlined and efficient.

How did Video KYC replace traditional KYC methods in identifying a user’s identity?

Before entering the digital world, KYC was performed manually with conventional methods. It was one of the main concerns for banks and other financial institutions; e.g., When the banks used to onboard clients, they asked them to fill in forms, scan their identity documents and then make them wait for an answer. In some cases, they also used to visit client’s residences to check whether they had given the correct address proof or not. This was no doubt a time-consuming job and also cost a lot of money.

In contrast, Video KYC has emerged as a revolutionary solution for this problem, replacing traditional KYC methods for identity verification. Unlike complicated paperwork and in-person visits, Video KYC solutions leverage video conferencing platforms and APIs to streamline the process. It has undoubtedly reduced the cost and saved time and effort of both the client and financial institutions. It is more suitable than the traditional method because it ensures security and accuracy at a higher level.

Video KYC platforms enable individuals to authenticate their identities via secure video calls, ensuring immediate verification and minimising the potential for fraudulent activities. The adoption of Video KYC has revolutionised the landscape of identity verification, enhancing speed, efficiency, and user-friendliness while diminishing the dependence on conventional KYC approaches.

What are the benefits of Video KYC?

Video KYC is more accurate because automated algorithms can detect features and patterns that are invisible to the human eye. There are several ways that serve as a benefit of Video KYC;

• It is extremely effective at preventing deep fake, spoofing and other identity frauds.
• It saves both time and cost for an individual as well as a company.
• It helps onboard users safely and securely.
• It eliminates the need for physical presence, allowing identity verification remotely.
• Video Kyc solution providers guarantee the security of video calls and data, adhering to rigorous regulatory standards.
• It is beneficial for individuals as well as banks and financial institutions.

The video KYC process involves a live video call between a user and a verification agent. During the call, the role of the agent is to review the customer’s identity documents, such as passports or driver’s licences, ensuring their authenticity. This real-time interaction enhances the accuracy of identity verification and reduces the risk of fraud.

It saves resources and helps in customer onboarding, becoming a win-win situation for both businesses and users.

Importance of Video KYC in Different Countries

Video KYC has taken the lead due to their immense transformative impact in the field of digital identity verification. Here are a few countries that have made Video KYC mandatory in digital identity verification procedures-

1. Germany- Video KYC has been a part of their regulatory landscape since 2015 when Germany’s financial regulatory body (BaFin) introduced Video KYC requirements for remote verification.
2. Spain- Since 2018, SEPBLAC, their AML authority, has demanded an authorised Video KYC process for financial institutions.
3. India- According to Section 18 of India’s Master Direction on KYC, financial institutions and banks have to include Video KYC in their verification processes mandatorily. They are also told to include Video KYC, specifically in the form of Video KYC interviews.
4. European Union- It has been made compulsory in the European Union that a Qualified Electronic Signature (QES) will only be granted on one condition when the individual has undergone a video verification.
5. United States- Video KYC has entered various sectors, including Fintech, healthcare and banks. Companies are dependent on video KYC platforms to verify the identities of customers and patients, ensuring data security and regulatory compliance.

Many national anti-money laundering (AML) laws require or allow video KYC for high-risk customers and transactions. Here are some jurisdictions where video identification can be used for KYC:

• Australia
• Germany
• Canada
• India
• Ireland
• Japan
• New Zealand
• Singapore
• South Korea
• United Kingdom
• United States

Conclusion

Video KYC solutions have built a position of their own in this digital era. Video KYC companies have played a vital role in making these solutions accessible across various industries and countries. The transformation from traditional KYC methods to Video KYC has also been remarkable. From Germany to the United States, Video KYC is becoming a mandatory component of the identity verification process, further validating its role as the future of digital identity verification.

More About Us

IDMlive is an innovative solution offered by IDMERIT, revolutionising the KYC process for video verification. IDMlive not only verifies an individual’s presence but also features the ongoing verification process at the dashboard. It also ensures compliance with several regulations like KYC, GDPR, and AML.

If you are seeking an efficient video KYC solution to authenticate your customers’ identities, IDMERIT’s Identity Verification platform is worth looking at. Reach out to one of our Identity Experts and get a no cost, no commitment product demonstration along with consultation tailored to your specific needs.

The post Video KYC: The Future Of Digital Identity Verification appeared first on IDMERIT.

• Banks and Money Laundering
• Steps to Achieve AML in Financial Services
• Banking AML Compliance and SAR, STR filings
• How to Ensure Optimal AML in Finance Procedures

Anti-Money Laundering, AML in banking and finance, is a legal obligation that the industry must oblige to ascertain they do not knowingly or unknowingly support money laundering and terrorism financing activities. Banking is a major financial service, and AML in banking is almost synonymous with AML in finance.

Banks are obligated to perform all anti-money laundering checks on their customers, as the launderers most exploit the banks for placement, layering, and integration – the three stages of converting the illicitly gained money into financially acceptable form.

Unlike earlier methods of form filling for filing suspicious transaction reports (STRs) for cash deposits beyond the threshold levels, modern anti-money laundering or AML in finance follows advanced Artificial Intelligence (AI) and Machine Learning (ML) technologies. Simultaneously, many banks are adopting Blockchain technologies to fulfill their AML-KYC compliance needs.

Banks and Money Laundering

With increasing volumes of online payments and virtual banking operations in practice, new forms of money laundering in banking have become all the more sophisticated and not as easy to capture.

For instance, a rise in the number of card fraud, friendly fraud in payments, and a new form of e-commerce money laundering, called transaction laundering, all have come into play.

It makes the current situation challenging for banks and money laundering detecting authorities, adding complexity to the daunting task of bringing perpetrators of financial crimes to justice.

Steps to Achieve AML in Financial Services

To remain AML-CFT compliant, anti-money laundering or AML in banking has certain procedures. The first always remains to Know Your Customer (KYC) or Know Your Business (KYB) for identity verification of the customer and to ensure the person is the person they claim to be. However, AML in financial services is also about continuous due diligence and ongoing monitoring. Frequent ID document checks and upgrades also form an important part of the AML measures and are often linked to enhanced due diligence.

The next in the AML in financial service fraud mitigation measure is client screening against individual, organizational or national sanctions. Client screening against politically exposed persons (PEPs) and adverse media lists is next on the list, and also equally important to check if the customer holds any influential position or has gained negative publicity in the past.

Banking AML compliance procedures have one final important measure, i.e., transaction monitoring. Positive KYC identity verification and screening checks don’t mean the customer is risk-free. Hence, AML in banking calls for continuous monitoring of customer behaviors and activities. To abide by this important AML in banking obligation, the financial institution must use an effective AI-ML base transaction monitoring solution.

Banking AML Compliance and SAR, STR filings

Financial Action Task Force (FATF), an international AML-CFT policy-making body for financial and regulated institutions, ascertains the prominent role of the Financial Intelligence Unit (FIU) in combatting money laundering and terrorism financing nuisances. Each FATF member nation has one national FATF FIU body setup.

The banking risk team is subject to filing all Suspicious Transaction Reports (STRs) and Suspicious Activity Reports (SARs) to the state FIU within the stipulated time for prompt investigations.

How to Ensure Optimal AML in Finance Procedures

Employee training and effective in-house risk mitigation technology are the two main factors that define the quality of AML in banking efficiently. Practical AML staff training, with regular tests and revisions, determines the proficiency levels of the staff. Alongside this, the banking AML compliance engine must be such that it can be easily integrated into the existing operating system without creating much friction.

State-of-the-art automation tools for anti-money laundering in banking can save the organization from financial penalties and help build a strong reputation that helps in customer retention and new client acquisitions.

If you are a financial service looking for AML-CFT implementation in your organization, IDMERIT offers hassle-free integration with single API AML automation. You may further read pertinent information on our website or book a free consultation and get in touch with our AML financial crime manager for your business.

The post Anti-Money Laundering (AML) in Banking and Finance: Best Practices appeared first on IDMERIT.

The emergence of digital transformation and end-to-end digital services in banking has put pressure on financial institutions to do more for the sake of convenience for today’s banking customers. Replicating an interpersonal yet seamless customer experience with a focus on speed, standardization and simplicity is no easy feat in a digital environment.

As the banks were caught in the conundrum of whether to digitize customer onboarding or not, the COVID 19 pandemic acted as a catalyst thrusting the banks towards the inevitable. Banks could no longer procrastinate from embracing full-scale digitalization.

The Current Status of Digital Customer Onboarding in the Banking Sector

The digital customer onboarding in the banking sector was mainly driven by two factors; the pandemic and anti-money laundering (AML) policies. Depending on where you live, both factors may not have had any positive effects on the way you bank. Despite threats of penalties and demands from customers, banks are still slowly adopting digital customer onboarding practices.

The reasons behind the slow change may have to do with three main factors:

• The potential loss of customer loyalty
• Lack of knowledge and experience in designing a client-centric digital customer onboarding process
• Retaining access and control of cybersecurity systems and protection of customer data

In some companies or countries, there is also the added concern in the reduction of labor needs. And for these banks, putting more people unemployed doesn’t seem like the best way to improve and retain customer relations. Sadly, the result of this philanthropy is continued archaic manual processes and almost non-existent global ID verification.

As much as banks have embraced automated ID verification, document verification is still a burning issue and a key area of focus in the new Bank Secrecy Act (BSA). Along with the focus on Ultimate Beneficial Owners (UBO’s) and international accounts, the banking sector needs to do more with global

ID verification and digital identity management. Though some banks have made strides into digital onboarding, unfortunately, their efforts weren’t very effective. However, we can use their setbacks as the learning curve for the banking industry.

• Complex online process
• Partial digitalization makes customer visits to branches necessary
• A paper-based ID validation system
• Failing to adhere to legal/regulatory AML compliance
• Lengthy navigation platforms that may lead to a higher abandonment rate
• Lack of multi-channels

If you have ever been to a bank recently, you can attest that there are banks still making these same mistakes today. And if you wait long enough, you’ll probably witness an employee skipping elements of Know Your Customer (KYC) to speed up the process. As much as banks don’t want to admit that dirty secret, it happens because we are human.

Humans get tired, hungry, and have problems and needs. We may not want to face the reality that the human element is a threat to digital customer onboarding, but we have to address it. Because it is in the human factor most of these setbacks arise.

• Banks may not have provided sufficient KYC training or oversight.
• HR was ill-equipped to hire cybersecurity, marketing, and digital experience professionals.
• Bank executive management didn’t make proper use of consumer data for customer onboarding solutions.
• Or it can simply be Johnny Teller just not doing their job as they are supposed to.

Whatever the deep cause behind these early failures, as a whole the banking industry must take these lessons to heart. Instead of treating them as failed customer onboarding solutions, pinpoint where the client onboarding process failed and address potential gaps in the process and its implementation. Note, the client onboarding process can be fixed one hundred times and be the most advanced ID validation system on the planet, but if the implementation is the real issue then those deep-seated concerns need to be addressed first in the house.

Benefits of Improving Digital Onboarding Solutions

• All customers will thank you

Though there still are the rare birds who love visiting their favorite bank representative to chat. Most of the banking community wants that home delivery service treatment from their banks that they could get everywhere else. After all, the customer gives you money, why shouldn’t they get the service they deserve.

In all seriousness, improvements in customer onboarding as a whole should have been made before digitalization. Even when performing in-house tasks, the client onboarding process wasn’t completely standardized. Yes, you need extra confirmation when dealing with high-risk clients, but what exactly were some banks’ criteria for determining high risk? Again, we go back to human error and biases which opened the door for fraud and money laundering.

Digital onboarding reduces the potential for human error, bias and improves customer safety and service. Despite the potential outcome of a smaller workforce, it also means better accountability. Supporting actors of criminal elements will now have fewer people and untraceable actions to hide behind. More benefits of improved digital customer onboarding solutions are:-

• Reduced Operating Costs

Going paperless for years has the theme of being environmentally conscious, but most businesses adopted it because of lower operating costs. It’s the biggest win for both customers and the banks. Aside from the obvious environmental protection bonus, it also reduces the need for customers to walk around with files of documents for every major transaction.

• Transparency in Operations

Digitalization will automatically standardize key aspects of online KYC verification and reduce incidents of human bias and errors. A reduced paper trail doesn’t mean complex online procedures. Machine learning-powered by human-guided AI would still have the final say in processes like online KYC verification and each change to these operations is recorded. Therefore, there are fewer chances for chicanery.

• Stricter Adherence to AML Compliance Regulations

As of late 2020, there were banks and financial institutions that were still not AML compliant and facing hefty fines. Repeat offenders seem to have disregarded any interest in AML compliance. Standardized digital customer onboarding with stringent oversight can put a dent in their unsafe and illegal practices while improving customer data security and employee protection.

• Better Digital Identity Security and Management

Cyberthreats are a major concern for not only the financial industry but the global economy as well. Data protection in the banking sector is a matter of importance to all banking and non-banking citizens. Priority must be given in creating secure digital identity security systems and restricted databases that require verified identity passes to grant access.

• Improved Customer Onboarding

Imagine 24-hour banking without limits! It is possible and though some banks offer 24-hour access, it still requires a lot of in-house visits to finish your transaction. Also, some of these online processes are longer than visiting the branch! Creating better digital customer onboarding solutions should cut back on lengthy sign-ups, meet online KYC verification requirements and improve customers’ control over their account access.

Designing Client-Centric Digital Customer Onboarding Solutions

Keeping the focus on a frictionless customer experience is a smart start in designing client-centric digital customer onboarding solutions. Walking a mile in the customers’ shoes allows banks to better understand what the customer goes through when using their services.

Yet in early adaptations, banks eschewed this idea and designed the digital onboarding process with their organizational operations in mind. Thereby creating the incomplete and inefficient client onboarding processes we see today.

To fully correct these issues in digital onboarding, banks have to be prepared to make drastic changes in both their operations, human resources, digital identity management systems, and what’s considered real-time identity verification.

There must be an open-minded approach to technology, education, and making organizational changes. Designing client-centric digital customer onboarding solutions is easy with the right technical expertise and implementation can be just as easy with an ID validation system from IDMERIT.

Here is how IDMERIT’s IDMkyX platform can be a part of your client-centric digital customer onboarding solutions:

Automated ID Verification in Digital Onboarding

Going digital does not mean emulating the traditional onboarding processes in a digital platform. It is not transferring the lengthy, complicated paper-based forms in a web or mobile interface. To apply a customer-centric design approach keep everything short, simple, and easy to use.

• Keep the whole client onboarding process under 5 minutes.
• Limit questions to a minimum and avoid repetition
• Inform customers why data is required and how it is used to gain their confidence
• Introduce Smart e-Forms with guided-snippet based flow, supported by automation of IDMautofill API to reduce data entry
• Automated information saving functionality to give customers the option to drop out in the middle of filling a form and restart at their convenience.

Standardized AML Compliance for B2B Client Onboarding Process

The basics of digital customer onboarding in the banking sector need to be overhauled. In this gig economy, all new client onboarding checklists should account for enhanced due diligence as part of B2B KYC requirements. Mis-steps in B2B client onboarding can be harder to correct and address once the damage is done.

Naturally, B2B clients have a longer onboarding cycle which leads to greater frustration for all parties. Unclear leadership roles, AML compliance requirements, and laissez-faire attitudes towards UBO’s always make banks the losers when it comes to B2B client onboarding. Start with a conversation using IDMlive to discuss the first three steps with your B2B client.

• Start with a financial advisor for business development. New or old, discuss future goals
• Understand the business organizational structure and be prepared for signee changes
• Discuss the legalities of the business structure and AML compliance requirements
• Use independent oversight in all document verification and global ID verification
• Take the necessary steps to assess risk with IDMtrust which doesn’t need their Personally Identifiable Information (PII) to check their risk score.
• Do regular financial check-ups to stay up-to-date on B2B client changes and reduce repeat requests

Mobile ID Verification With An Integrated Omni-channel Experience

• Mobile phones aren’t the only tools banks need to use in their quest for a more multi-channel approach. Tablets and laptops make that list as well. Anything with a screen can be used by customers to access their accounts and engage with your service.
• Neglecting mobile ID verification when at 55% mobile has the highest market share of digital devices is pretty counterproductive.
• Introduce self-service models across multiple platforms to empower customers towards quick self-resolutions of specific problems
• Mobile optimized ID validation and document verification for instant submission and automated approval
• Validate ID anywhere by using IDMsocial for online ID verification through social media
• Include smartphone biometrics into mobile ID verification
• Increase Global Collaboration for Powerful Digital Identity Security

Cybersecurity cannot be overlooked in a discussion about online ID verification, global ID verification, and data management. Global collaboration between government regulators, corporations and the banking sector provides a solid support system for digital identity security systems. By increasing communication and shared concerns, all parties can have a stronger foothold on organized crime and money laundering.

• Performing an automated global ID verification by online ID verification from any national ID database
• Using modern technology such as IDMdevice to verify device used and validate ID
• Access to all up-dated global watchlists
• Improved AML compliance checks
• Integration with the credit bureau for document verification and to validate an ID
• Embrace the Power of Data and Analytics in Digital Identity Management

Maybe banking heads needed to do more robust research when it came to finding out exactly what their customer preferences are. Current systems reflect a certain disconnect with B2C customers and too much fluidity with B2B clients.

Paying attention to the data makes segmentation and engagement easier. It allows banks to understand where, when, and how their customers are interacting with them and should be the basis of which any client-centric digital customer onboarding process.

Require a verified identity pass for data access. It could be a biometric scan or any unique personal identifier

Include governmental or independent oversight in digital identity management

Adhere to BSA/AML compliance standards for personnel management which includes robust training, rotation, and oversight

Use consumer transaction records and behavior in the fight against fraud and money laundering

Closing

Though the pandemic and AML policies have accelerated the pace of digitalization pushing banks beyond their traditional boundaries, it doesn’t mean the industry was unprepared. Cyberthreats and the rise in digital fraud put the banking sector on high alert to potential threats and poised to make changes. However, banks concentrated on product innovation and financial service offerings that offered the same level of service in the traditional sense but in a digital environment.

As great as this step was for digital services, banks didn’t truly leap full digital onboarding solutions until 2020. And for many customers, it seems a little too late and not wholly customer-centric.

Major issues like mobile ID verification, global ID verification using watchlists, regulatory reporting, and simple employee online KYC verification training, were not embraced as necessary to an efficient client onboarding process.

Implementation seems to be the main culprit behind these onboarding failures and AML non-compliance fines. Therefore, for the good of the banking sector and its customers, perhaps it would be best if digital identity management and security were left to the professionals.

That way, banks can still provide a versatile customer onboarding experience, reduce the risk of fraud and validate ID anywhere with the backing of IDMERIT’s IDMkyX platform.

Contact us today for a client-centric solution to digital onboarding.

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