Know Your Customer, or KYC, is crucial to business. However, assessing the suitability of customers for a business relationship can be time-consuming and costly, particularly when conducting manual KYC. Fortunately, there is a solution. Verif-y provides automated KYC solutions to help businesses increase efficiency while reducing friction and unnecessary costs. Let’s take a closer look at the importance of KYC and why automated KYC is the best option for your organization.
What Is KYC & Why Is It Important?
KYC is the mandatory due-diligence process of verifying or authenticating the identity and potential risks of a customer. Maintaining compliance with KYC regulations is crucial to prevent a range of potential problems, including financial crimes, money laundering, registration issues, illegal schemes, and more. Essentially, KYC enables organizations to truly know who they are providing their services to and verify they are who they say they are, protecting them from fraud, money laundering, and corruption; it is critical in assessing and monitoring a customer’s risk.
The Challenges of Manual KYC
While many organizations believe manual KYC to be more cost-effective, there are several reasons why manual KYC can be more costly than the convenience of an automated solution. For instance, mistakes in KYC can lead to a lot of secondary issues: fraud, money laundering, and fines. With recent changes in compliance, companies can now incur huge fines due to non-compliance. In the first half of 2021 alone, almost $1 Billion in fines were issued due to non-compliance with KYC, AML, and Data Privacy. Another not-so-obvious cost is the risk when an organization places sensitive data into the hands of multiple individuals, posing a potential breach of data privacy obligations. Additionally, the elevated risk of approving someone for any service puts your organization in jeopardy of a huge loss regardless of industry. Rental Companies, Financial Institutions, Service providers, and any company that does not rely on technological advances to support their process are at risk of profit dips if they are not clear on their end user. KYC is a very meticulous process requiring nothing less than complete accuracy to successfully operate. Unfortunately, human error can occur, and when this results in non-compliance your company will not only incur the cost of a fine, but also reputational damage.
The good news is human error is eradicated through AI and machine learning. Machine learning can catch errors and find discrepancies that would be near impossible for any human to master. Even if they were able to, regulations change, imposters become more sophisticated, and it becomes more difficult to identify them due to technological advances being leveraged. By using extracted patterns from data, AI and ML can detect fraudulent documents and suspicious activities more efficiently and accurately.
Finally, a cumbersome KYC process involving multiple pieces of personal information, lengthy forms, and the need to provide this information either in person or via mail, makes for a dissatisfied customer. A recent survey found that 89% of bank patrons did not have a good KYC experience, which led to 13% of the patrons changing their financial institution all together. The key to success is finding a balance between a swift onboarding process and the highest levels of compliance.
If you want to minimize costs and retain customers, then manual KYC certainly isn’t a great option. Manual KYC can be very costly, with each new client potentially costing your business thousands of dollars.
Benefits of Our Automated KYC Solution
At Verif-y, one of our flagship services is its automated Know Your Customer (KYC) solution. Our automated KYC solution is designed from decades of experience in real-world financial services and trading experiences. It provides an easy-to-integrate solution that simplifies the KYC process.
Verif-y's automated KYC solution leverages artificial intelligence and machine learning. One of the key benefits of using AI in KYC is its capacity to reduce costs significantly by not only eliminating data entry, but minimizing the risk of costly non-compliance fines. As previously mentioned, the speed and accuracy at which the AI works is far superior to that of a human being. Not only would manual processing be more costly but would result in a longer onboarding process.
An additional layer that can provide institutions more safeguarding is liveness. With hackers becoming more sophisticated at impersonation and breaking protocols of verification, there are now ways of beating AI. Liveness has the ability to detect real biometric factors of the user, such a motion detection, pupil dilation, etc., and increase the levels of trust in transactions and requests. Liveness is quickly becoming an essential technology for verifying one’s identity.
Switching to Verif-y’s automated KYC solution will help you to speed up your KYC process, reduce costs, and eliminate the potential for human error and maintain the security and privacy of your customers’ data. Our solutions leverage cutting edge AI/Machine learning and OCR technologies to detect fraud while maintaining a quick and simple user experience and simplifies KYC by integrating directly with your existing processes. You don’t need to worry about changing processes for your business, Verif-y will customize the solution for you. We have a frictionless on-boarding process that includes identity and credit card scanning, selfie capturing, liveness tests and even customized flows for specific customers. Our KYC automated solution is highly secure, transparent, and cost-effective.
To find out more about Verif-y's automated KYC solution and the benefits it can provide to your business, visit our website here.
Avoid high costs, data privacy issues and potential human errors by switching to Verif-y’s automated KYC solution. Contact our team to get started.