ID Verification - KYC

The 5 Pillars of KYC

Vanita Pandey

January 20, 2023
Table of Content

Regulatory functions inside of a business are often looked at as a cost center; but smart companies are turning compliance into a competitive advantage. By investing in compliance – including technology, people and processes – some organizations are driving greater revenues and growing revenues. Integrating compliance into every aspect of the businesses means you can serve customers better, onboard new customers quicker and in greater numbers, significantly reduce fraud and avoid the hefty fines associated with regulatory violations. 

A key aspect of compliance for many organizations is Know Your Customer (KYC). There are many good reasons why businesses in different industries are required to conduct KYC checks before onboarding new clients. KYC checks are vital for upholding anti-money laundering (AML) laws, fighting fraud and cybercrime, stopping organized criminal enterprises and staying compliant. 

Yet, KYC compliance is often a burden for businesses and the law-abiding consumers that have to submit documentation to meet these laws. 

KYC is complicated, and businesses often suffer from inefficient processes around it. Organizations can waste a lot of money and countless internal resources and man-hours with inefficient KYC processes. 

Furthermore, criminals are increasingly using genuine-looking synthetic identities which legacy systems cannot identify. Manual reviews cause delay in user approvals and can result in customer resentment. They also increase operational and user onboarding costs that can slow down business growth and impede expansion into new markets.

To combat fraud, businesses often resort to heavy-handed authentication methods. But this has the adverse effect of introducing friction for consumers, who become more likely to abandon the process.

When this happens, users can have a very frustrating experience. It is imperative to find a KYC process that balances user experience while remaining compliant and stopping fraud and cyberattacks. 

The 5 Pillars of KYC

Ultimately, the optimal KYC solution should solve for these five areas

  1. Accuracy: The solution must be accurate in validating the customer's personal information, such as name, address, date of birth, and government-issued identification documents, with a high degree of certainty.
  2. Compliance: It must also comply with all applicable regulatory requirements, such as AML regulations, GDPR, and others previously noted. It should also be able to update its processes and procedures as the regulatory landscape evolves.
  3. Speed: This is key; as even the most accurate and compliant solution is useless if it takes a lengthy amount of time to onboard new customers. It should be able to quickly authenticate the customer's identity, complete the verification process, and provide a clear result.
  4. User experience: Likewise, you need to offer a seamless and user-friendly experience for both the customers and your business, as noted above. It should be accessible and easy to use, regardless of the device or platform.
  5. Security: Finally, the solution should ensure the security of customer data and personal information. It should use robust security measures, such as encryption and multi-factor authentication, to protect against data breaches and unauthorized access. 

How Caf Helps

Caf can help your business with all KYC needs; and enable you to quickly and accurately verify all customer while adhering to all regulations, ultimately driving revenues and business growth

With customizable rules for risk assessment, you can automatically approve or reject users, while simple, user-friendly workflows help deliver optimized user onboarding experiences for greater customer satisfaction and increased conversions.

The use of latest technologies combined with continuously improved AI algorithms and ML models makes it easier to validate identities, manage new and old users, enhance risk-decisioning and ensure compliance with changing regulations quickly, at a lower cost, and without the need to rely heavily on your dev team.

Create personalized user onboarding experience for genuine users and expand your business while remaining compliant to local and global KYC/AML regulations efficiently. Click here to request a demo. 

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"The 5 Pillars of KYC"