With the advent of digital technology, the world is rapidly evolving. Where digitization has brought innovation to the table, it has also created the potential risk of security threats and data breaches. When it comes to corporations, a steady rate of operational activities is quite significant. The occurrence of unforeseen and constant process delays in activities result in a bad experience for the customer.
Customer verification for online businesses was considered an uphill task until online KYC solutions were introduced. Today, financial enterprises and online banking firms are adopting innovative methods of verifying their customers to fulfill requirements and procedures. Online KYC verification plays an important role in contributing to the fulfillment of RegTech procedures that help rescue online fraud.
The Importance of KYC
Know Your Customer (KYC) is a necessary verification obligation that businesses practice to validate their customer's identity and mitigate illegitimate users. The standard process helps in identifying possible risks in customer onboarding, comply with KYC/AML obligations, and provide a seamless customer experience. A study by Wyzowl suggests that 86% of people believe that when an enterprise invests a good sum in onboarding measures and customer education, customer loyalty is expected to rise. Online businesses are moving from conventional and tedious KYC methods towards online KYC verification to serve their clients with a better experience.
Online KYC and AML Non-Compliance Costs
The omnipresence of financial crimes has made it necessary for online businesses to enforce security measures. The Bank Secrecy Act of 1970 laid the foundation for Anti Money Laundering (AML), and related business verification policies to put an end to money laundering, or at the least deter them. Non-compliance results in heavy penalty costs and a drop in market reputation.
A statistics report, The True Cost of Compliance with Data Protection Regulations, published by the Ponemon Research Institution proposes that almost 5 million USD paid in non-compliance penalties by enterprises. Online KYC verification services are a good bet when it comes to complying with AML procedures and policies.
KYC compliance comes under the family of AML obligations and helps protect customer data and identities. Once the data is acquired by online KYC verification it is protected using international compliance standards defined by the General Data Protection Regulation (GDPR) and the Payment Card Industry (PCI). Hence, there is an increasing demand for online KYC verification solutions for businesses to meet the needs of AML. This way, they can avoid non-compliance penalties imposed by law enforcement departments.
Secure Customer Experience
There is an immense need for a secure communication channel for business communication. It has a primary relation to corporate sales and customer loyalty. For a business to provide its customers with a seamless secure user experience online KYC verification is the ultimate solution. By fusing AI-powered technologies with the online KYC process, there is are minimal prospects of online fraud. This positively affects how good the customer feels towards their data being protected.
Audience-Oriented Services
Some online platforms require their customers to be old enough to avail of their service. A few practical examples are online gambling and dating platforms which require sound user discretion. Online KYC verification using secure and state-of-art technology makes the user authentication effortless. It incorporates various differentiating techniques such as biometric, written consents and, online document verification which significantly makes age verification a simple task. Online KYC verification services usually integrate their Application Programming Interface (API) with the enterprise’s platform which enables online KYC, tailoring services for age-oriented content.
To sum it up, Online KYC verification, is an effective solution for secure customer identification, avoiding AML non-compliance costs, and seamless user experience.