KYC compliance

KYC (Know Your Customer) compliance service is a process through which businesses verify the identity of their customers and assess the potential risks involved in doing business with them. This is typically done to comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, as well as to prevent fraud and other financial crimes.

Stay compliant

Compliance with KYC regulations is a must for the financial industry but also for many other branches of business. KYC stands for Know Your Customer and it refers to the process of verifying the identity of potential customers.

Leverage your security with effective KYC process

Effective KYC processes are the foundation of successful compliance or risk management programs. In recent years the demands for meeting KYC regulations are growing. Stricter regulatory requirements come into force with anti-money laundering (AML) processes in mind.

Avoid fines

KYC compliance services can help businesses to avoid fines and penalties related to non-compliance with AML and CTF regulations. These regulations are designed to prevent money laundering, terrorist financing, and other financial crimes, and failure to comply with them can result in significant fines and reputational damage.

What is KYC Compliance?

Anti-Money Laundering (AML) is a broad term containing the legal framework of legislation and regulation whose aim is to – as the name suggests – counter the risk of dirty money and terrorism financing. Such a law can only be met with a proper Know Your Customer (KYC) procedure, as it is the base of the AML process and an inherent step towards safety and compliance.

At the core, you need to fully understand who you are doing business with – including verifying the customer’s identity, as well as monitoring and analyzing their activities – to reduce the risk of financial crime and the threat of terrorism and abide by the law. Combining KYC verification with AML screening assures that your business is risk-free. However, the requirements have been getting stricter in recent years, making it hard to keep up with them.

What are the main risks of the lack of KYC procedures?

Money laundering

The end-user submits details, including name and date of birth, through an online form provided by the operator. Depending on the industry, some other personal information may be required.

Terrorist financing

Lack of KYC procedures can make it easier for terrorist groups to finance
their activities through the financial system by disguising
the source of their funds

Fraud

Without proper KYC procedures, fraudsters can impersonate legitimate customers and open accounts or perform transactions under false pretenses, leading to financial losses for businesses and individuals.

Regulatory risk

Lack of compliance with KYC regulations can lead to regulatory sanctions, fines, and legal action, which can be costly and harm the long-term viability of a business.

How to choose the right KYC & AML compliance service?

It is not a secret that the appropriate and reliable KYC & AML solutions provider is vital to keep a financial institution safe and sound financially and reputationally. It is also a matter of abiding by the law, which is absolutely crucial to make your business operate without any complications. So what factors should you consider when choosing this type of service? At Fully-Verified, we believe that it needs to be:

Tailored to your needs. Outsourcing the AML/KYC processes means you present your expectations and requirements and get professional help on your own platform or the provider’s platform alongside smooth integration with your business framework – it is simple like that.
Providing total security and being constantly up-to-date. The assistance in complying in such a fast-changing environment should be delivered in the highest quality and accordance with the newest updates.
Affordable. Because we know in-house verification service is relatively costly and possible to maintain only by companies with resources to hire experts etc.
Carried out in real-time. Whether it is verification of customer identity or identifying the risk, it should be done quickly, respecting your and your customer’s time.
Able to identify all kinds of existing or possible risks. Offering enhanced compliance while keeping your business away from high-risk entities – or making it possible to deal with them with required caution.
Serving superb customer service and is easy to use. Aimed at letting you stay ahead of the competition.

How to implement efficient KYC Compliance

Customers are used to quick and frictionless onboarding. When the process is too long or too complicated they may find another service provider with a more customer-friendly process. What is important when choosing the right KYC process in order to improve customers’ experience. KYC procedures can be tedious for a user so it is important to implement them in a smart way, for instance by outsourcing the identity verification to a company that specializes in KYC compliance and implements digital verification solutions to ease customer onboarding.

Main Elements of KYC Compliance

KYC process outlines various verification methods including document verification, face verification, address verification, PEP and sanction list monitoring, and more. These methods help companies understand their customers better as well as know the risks associated with them. The process of KYC verification consists of a few steps:

Data collection

Institutions begin their KYC procedures by collecting basic data and information about their customers, often by using electronic identity verification. The user fills out a form with information such as first and last name, nationality, document number, or date of birth. The information required may vary depending on the institution that is performing the KYC process.

Verification

Once basic customer data is collected the user presents an identity document to compare the data from the form with the information on the document. Authenticity checks are performed on the document to make sure it is a legitimate government-issued document. The user’s face is compared with the photo on the document to make sure that there is no identity theft and that the user is who they say they are. Additional documents like proof of address are verified.

Risk assessment

When it comes to assessing the risk involved with the customers’ onboarding there are a few factors that are taken into consideration. The company checks the results of the identity verification and the results of the PEP and sanction lists check, to make sure that the potential new user is not on any monitoring list or is not a politically exposed person. All of that information creates a users profile that will determine the users’ risk assessment, the scope of future cooperation, and the level of monitoring. Depending on customers’ risk they may be subjected to either simple Customer Due Diligence or Enhanced Due Diligence.

How Is KYC Compliance implemented Online?

Electronic KYC (eKYC) verification brings the KYC process into a digital world. That means that the whole verification procedure is done online. Nowadays, some institutions still conduct customer verification in a traditional (manual) way, however, the vast majority use a digital customer verification process.

The benefits of an online KYC service:

Speed

The manual process can take days to complete as opposed to online verifications that can be done within minutes. The speed of digital verification increases customer satisfaction and conversion rate. The use of Optical character recognition (OCR) speeds up the process and it can also be used to spot errors in fraudulent documents.

Easy access

The verification process can be carried out from anywhere in the world. The only requirement is a camera device and internet access.

Accuracy

The eKYC process is more reliable and has a lesser margin of error due to the fact that new technologies such as artificial intelligence and face recognition are used during the verification.

Adaptability

The online process is more adaptable and can be easily integrated via an API solution.

Multiple Checks

Multiple checks can be done at the same time as the verification process, they can run in the background during the identification process. Automated technology can also be utilized to carry out fraud checks on documents.

How can Fully-Verified help you ensure your company is KYC and AML compliant?

See for yourself how Fully-Verified offers a set of solutions to help you prevent money laundering and all sorts of financial crimes while combining all the above. Find out how we can meet your needs:

Auto-Verify – automatic solution, allowing users to onboard without friction and prevent fraud attempts. It combines automated image capture assistance, real-time user feedback during the process, and capturing pictures automatically at the best moment.

Live-Verify – video verification service carried out in accordance with the safety standards applicable worldwide, combining the strengths of trained human specialists and automated technologies. It replaces the slow and often ineffective real-life manual KYC process and allows seamless user onboarding.

Self-Verify – automated identity verification solution. The user is recorded and guided through the process for it to be double-checked by our specialists. Along with the video, you get pictures of the document, a user’s selfie, and all information from the documents extracted.

Sanctions and PEP – as an integral part of the KYC and AML process, we offer complete automated Sanctions, Watchlist, and PEP screening against over 350 databases issued by FATF, OFAC, UN, FinCEN, and more. The checks are conducted in the background, guaranteeing quick and seamless onboarding. We continuously follow the changes to keep our clients updated and compliant.

Proof of Address – verifying the user’s address is required when performing the KYC procedure. Such documents as bank statements and utility bills further confirm the user’s identity and tie them to a specific location. Consequently, you can be sure your customers are not from high-risk countries or restricted areas (whether by law or company policies). At Fully-Verified, your customers can comfortably receive real-time address verification service within our Live-Verify process.