Digitization has transformed the financial sector completely in the last decade, and financial institutions, banks and businesses have been forced to adopt new technologies. If your business requires completing KYC (Know Your Customer) regulations, you have to find a way to simplify the process for customers, and that’s exactly where digital KYC comes in the picture. Client onboarding is a concern that applies to all financial and related services, and by going digital, you can reduce the number of dropouts considerably. Here’s more on what every business must know about digital KYC.
What exactly is digital KYC?
At the basic level, digital KYC is about completing KYC requirements using digital means. Typically, this involves choosing a service, and they will provide an API, which must be integrated with your platform and application. This is a completely safe process and leverages the bank account of the user, so the basic KYC details, which includes the name and address, are immediately validated. The process will be backed by solid support, and you can be assured that the compliance aspects and FINTRAC/AML regulations are taken care of. Of course, not all companies offering such KYC products work in a similar way, so some initial research is always handy.
Why spend on digital KYC?
Because your customers don’t want to go for physical forms. Most number of KYC dropouts are related to the process involved in getting physical documents. With physical documents, the possibilities of errors are huge. Besides the scope of entering wrong details into the system, misplacement and loss of KYC documents are nothing new. For banks and financial institutions, managing physical KYC information is risky and can mean huge files, in case customer data is misused. With digitization, you can do away with all these concerns. The whole onboarding experience for customers is simplified, and this helps in better returns, and will eventually reflect in the profits.
If you are considering the shift to digital KYC, you have to consider what it means for your customers, if the compliance aspects are taken care of, and if the API is fast enough to reduce time required for KYC. It is also a good idea to go for an option that’s reliable and is being used by other known merchants and brands for their own KYC requirements. Think of this as an investment in the long run, especially as far as customer experience is concerned.