Establishing Requirements for Choosing a KYC Provider
Now we come to what YOU need. This is not as simple as looking at what approach sounds best and going with it, this requires forethought and planning. There is not necessarily a one size fits all approach. You need to weigh up a few things.
Firstly, you need to know what regulations affect you. Different industries have different regulations on what they can, and can’t do when it comes to KYC and general customer interaction. You will need to do the research and consult a legal expert to have a good idea of what you need to do.
Secondly, what experience do you want for your customers/users? Depending on the service you are providing you may want something more streamlined and easier to use. If you are concerned with security, regulations, and risk, you will want to look at a much more in-depth and secure form of KYC.
Lastly, you need to know what is important for you and your product:
- Is it vital to you that only the right people are using your service?
- What countries are your customers from?
- How will your chosen KYC solution fit with your user journey and overall system?
These are the things you need to be asking yourself. You also need to ask yourself what is more important to you. Your conversion rate or avoiding risk? A tighter KYC might deter some customers and lower your conversion rate, but is a weaker KYC worth the risk?
When you approach selecting your services you also need to decide if you will go to multiple providers for different aspects of it or will you use a one-stop-shop service provider to get a complete solution. While multiple suppliers might be more specialised in each area, you will have to coordinate with a lot of different facilities. Ideally, you will want to get an all in one package to facilitate everything.
Of course you could run everything inhouse, creating the systems from the ground up or using existing software, but there are several reasons why this is not the ideal approach. Not most of all being cost and a propensity to be more prone to errors in the early stages, which can be fatal for a new company. A great example of advantages to outsourcing your KYC processes can be found here at: https://fully-verified.com/why-you-should-not-use-a-diy-solution-for-identity-verification-and-what-you-can-gain-by-outsourcing-the-process/
How to Choose the Right Service Provider
If you have made the smart decision to outsource your KYC processes, you now need to know what to look for when deciding what service to use. Firstly, and most obviously, is service coverage. Does the service you are looking to use incorporate everything you need? Is it using all the relevant KYC methods, and can it interact with your customers in a positive, yet secure manner?
Secondly, does it offer full document coverage, including working with other languages? Not all of your customers’ documentation or information will be in the same language, and your system needs to be able to collate and analyse all the data the same, regardless of its language. This is especially important if you offer a global service.
Thirdly, and this one is the most important, does it adhere to the relevant regulations in your country? You absolutely cannot have a service that breaks regulations and gets your company into deep legal trouble. For example, if you are operating in Germany, you will need to make sure your service adheres to BaFin’s regulations, in Switzerland it will be Finma, and so on.
Fourth, what technology is being used and how are they handling their data storage? You need to know type of KYC service you require and if the company can actually deliver it in a professional and complaint way. Do they have functioning AI that can run facial recognition? Going further you will want to know where their data is stored, is it onsite or offsite and is it secure. Which country is the data stored in? Does it meet your local data processing regulations such as GDPR? All of this culminates in you wanting to find a firm that has advance technology at their disposal and the know-how to utilise it.
Lastly, the double-barrel of integration and pricing. You want a system that will be able to work alongside your company’s and your customers’ needs. Make sure that you use a KYC service that offers a sandbox so you can see if it will integrate with your needs. Of course, you will need to examine your budget and financial restrictions before you can make any choice. But don’t be afraid to pay out a bit more for a solid KYC system. It is always worth it.