Businesses in the financial sector are constantly struggling with compliance and regulatory requirements. While getting more customers is a crucial goal, it is equally important to be compliant with the required norms and rules, including FINTRAC / AML regulations, or else, fines can be huge. In fact, if you look at the fines on non-compliant banks and financial institutions in recent years, the numbers are staging. Know your Customer, simply called KYC, is the standard process of verifying the identity and details of a consumer, for the purpose of compliance with anti-money laundering regulations and other applicable norms. These regulations are country specific, but KYC is a must and cannot be ignored.
Why consider digital KYC and what does this mean?
Digital KYC is the same KYC compliance but without relying on physical documents. Traditionally, customers had to visit the required financial institution and submit papers in person. While physical documents are still accepted for KYC compliance, handling those documents and avoiding misuse of the information are concerns that businesses cannot do away with. Digital KYC compliance brings transparency in the system and simplifies the onboarding experience for customers. With online services, better fintech apps and other options, customers want financial services within their reach, and digital KYC compliance is the right step in this regard.
How does digital KYC compliance work?
For this, businesses must invest in what’s called the digital KYC API. It uses the bank account of the customer as a source for verifying the details and can be integrated into the platform and app of the concerned business seamlessly. Most of the better digital KYC APIs have 99% reliability and are designed to ensure compliance with FINTRAC / AML regulations.
Other things to know
If your company has been struggling with compliance and regulations, digital KYC might be the simplest step to streamline the process. Yes, there is an investment involved, but digital KYC also offers an edge to your business, because customers are likely to choose your brand over others, simply for the onboarding process. Besides the obvious competitive advantage, this is also a great way to add value and increase reputation of your brand. Switching to digital KYC might be a choice for now, but expect this to be a norm in years to come.
To know more on how digital KYC API works and if this is the right choice for your company, check online for companies that specialize in this sector.