The Ultimate Checklist to Build an Effective e-KYC Solution

Know your customers (KYC) is the process by which businesses identify and verify diverse customers and evaluate the probable risks of illegal transactions during business relationships. This makes it possible to detect and prevent fraud in financial transactions quickly and entails a legal obligation for financial institutions, including banks and non-bank financial corporations (NBFC).

There are currently two ways in which KYC information can be obtained. Using traditional methods where an officer goes to the customer to collect documents and verify their identity. The second approach is to use digital methods combined with the latest detection for technology to do the same. In which the identity and address of the consumer are verified electronically and this method is called an e-KYC solution.

In this article, we’ll talk about the checklist that will make your life a lot more comfortable as far as the KYC software solution is concerned.

1. Why is the KYC Process Required?

KYC and anti-money laundering (AML) are part of a broader category known as “customer due diligence”. In hopes of tackling international money laundering and terrorism financing, regulators have become increasingly active in this space of advancing Mobile money solution.

As a business, you are obliged to comply with the mountain of legislation and thus have to verify the identity of each client. KYC protects the fortunes of your company by protecting your business from fraudsters. Having a consistent KYC program automatically makes the business safer and more reliable.

2. Structure Of KYC Process

Once you set your goal to implement the KYC software solution into your platform, it is time to decide on the features and flow of KYC. Basis ID’s compliance officers will help you to build the process for your KYC software and AML compliance program.

Structuring your KYC flow allows you to understand a user’s integration, as well as data management and reporting.

• Do customers go through an identity verification process before using the service? Or can they access limited functions before KYC compliance?
• Is KYC just a follow-up process, or is it a step in unlocking various platform features?
• What data should your customers provide?
• Is there a second chance for users if they fail the verification?
• What does ongoing monitoring look like?
• Should reporting to authorities be automated or manual?

There are many more questions to consider, and it is better to map the entire flow to understand what your KYC process looks like.

3. Connect a KYC Service Provider

Once your KYC flow structure has been determined, connect to a KYC solution provider. You can opt for NFC payment solution based ID verification that makes the process more smoother. When selecting a KYC service provider, be sure to review multiple providers and evaluate the following.

• Does the KYC software solution contain the functionality you identified in the second step?
• Does the solution only provide ID verification software or does it include advanced features such as ongoing monitoring, EDD, and transaction monitoring?
• Is the KYC software provider able to automate compliance, or is there too much manual work?
• Does the provider offer a user-friendly data management platform?
• How long is the average verification time?

After exploring these questions, it is likewise important to ask for reviews, case studies, and demos from your potential e-KYC solution providers.

4. Design An Onboarding Process

Creating a smooth KYC flow is critical because seamless onboarding increases conversions, while a messy one can cost your company significant financial resources. In devising a user-friendly onboarding, consider the following questions:

• How long will it take to onboarding?
• Can users with less technology knowledge really understand?
• Is the process run or encouraged in any other way for the user?
• Are the instructions clear?

5. Create A Reporting System

After setting up the onboarding process with all its additional features, plan your reporting system. When you assess a customer’s risk and collect the required data about it, it needs to be stored. Basis ID organizes customer data into a user-friendly data management platform, where reports are conducted on a distributed secured server according to GDPR requirements.

When selecting a KYC service provider, ensure that the profile of the customers is easily accessible, neatly organized, and GDPR compliant. Besides this, determine whether you want to have an automatic reporting system that will send the reports to the authorities without compiling them manually or a manual one.

Reporting must be smooth and accurate as it is one of the most critical elements of the e-KYC solution.

Cost-effective KYC solutions exist and you should never compromise for a solution that you find too expensive as KYC processes are too much expensive. Therefore hire a dedicated software development team from the market who can provide you cost-effective KYV software for your business.

Summing Up

As financial services increase their popularity, lawbreakers find new ways of digital money transfer software. In response, the monetary authorities have introduced new rules. Over the next several years, it will be important to have an efficient KYC process to maintain the complaint and minimize the risk of fraud.

Since each organization is different, its expectations regarding KYC software solutions are different. This checklist will help you to stick to the right track while building an effective e-KYC solution.