KYC providers are basically providing the services to businesses for digital identity verification of customers. Although, it addresses a wide range of queries regarding the customer onboarding process. Among others, these queries include Know Your Customer (KYC) compliance; avoiding chargebacks, and preventing identity fraud. As there is too much at stake for the finance industry to ignore these issues, therefore, the KYC providers present a holistic approach to safeguard businesses.
What is a KYC Provider?
A KYC provider is a third-party service provider. Their services are related to remote identity authentication of customers of a particular institution. Organizations including, but not limited to, online businesses, retail companies, hospitals, travel companies, etc. are required to apply Customer Due Diligence (CDD) procedures. Along with CDD, these companies provide verification solutions for Politically Exposed Persons (PEPs) in their Enhanced Due Diligence (EDD) feature.
The Growing Need of KYC Providers
KYC compliance is performed not only for validating the user’s identity but also to comply with regulatory measures across the world. If a customer of a business is involved in crimes like terror financing, human trafficking, or money laundering, then the said business will be termed as guilty for not conducting proper customer due diligence. It is incumbent upon the businesses to devise a procedure from which the criminals cannot find any loopholes. If they fail to do so, the sole responsibility will lie on the shoulders of that business.
The KYC process is undertaken digitally so that to cover all the individuals and businesses under one roof of a KYC service. Moreover, the compliance regulators responsible for curbing money laundering and terrorist financing are basically monitoring the businesses for KYC/AML compliance. If they step out of line, knowingly or unknowingly, the businesses are slapped with non-compliance penalties. For these reasons, the safe route for businesses is to employ the services of a KYC provider.
Then, How are Businesses Conducting KYC Processes?
As it has been established that businesses do need the services of a KYC solution to conduct the customer onboarding process on the behalf of them. So, let’s go to the varying nature of KYC providers. Well, traditionally the KYC process was conducted by the institution’s own compliance team through manual verification methods. Moreover, even if employed a third-party provider, they did not provide digital services. But, now technology has advanced to a level that manual processes have become disposable. They are making the space for digital KYC solutions. Although, it would not be wrong to say that they are making the place for themselves by their own accord.
Building a Case in Favor of Digital KYC Providers
The selection of a digital KYC provider over a manual one has the following benefits.
- The detection of different document patterns like signatures and watermarks is efficiently performed by digital KYC solutions.
- The remote KYC solutions have an accuracy of more than 98.5%. Here, the speed of the process is not compromised either.
- The probability of human-errors resulting from tiredness is eliminated.
- It is time and cost-effective.
- The cumbersome process of waiting in the queue for hours is eliminated.
- It is suitable for the current pandemic environment operating under social distancing measures.
In Search of the Best KYC Provider
If you are a business looking for any kind of third-party service, you might want to employ the best one from the bunch. When it comes to the digital KYC industry, there are varying degrees owing to the competency and reliability of their services. While looking for KYC services, you would also want a solution that can perform KYB checks too. Here, you would want to look for the best customer service for KYB as the provider will be directly making your business compliant with the compliance regulations.
Moreover, there is a mandatory checklist of features that a KYC provider must-have. These features are stated below:
- They provide biometric verification tools like face recognition, etc.
- They can detect advanced forgery attempts like holograms, and replay attacks.
- OCR tool for data extraction from documents.
- Their pricing models are public.