The 2008 crisis had a deep and cascading impact on the financial market and all allied sectors. Regulatory bodies had to find ways to regulate dealings, and as fintech improved, the focus is now more on automation and digitization. If you are running company related to finance or provide financial services of some sort, you need to be compliant with all regulations, and one of those is KYC. FINTRAC / AML regulations require businesses to complete the Know your Customer process, and while that was cumbersome for a while, digitization has simplified the same.
In this post, we are discussing some of the basics that businesses need to know.
Know your customer is the process of verifying the identity of clients, with the intention of preventing frauds and money laundering. Clients may have ill intentions, and with KYC, businesses have a fair chance of preventing such acts. Regulatory bodies have now made KYC compulsory and mandatory for financial institutions, and it is a norm in many industries. Besides banking, insurance and exports are other industries that demand KYC for business, not just for anti-money laundering compliance but also for anti-corruption needs.
Digital KYC is not just a buzzword anymore. With FINTRAC / AML regulations, businesses are forced to think of digitization for KYC, and it does offer a few immediate advantages. For instance, physical documents were prone to misuse, and often, erroneous entries made way into the system. Human errors and misuse of data can be prevented, and more than that, businesses can satisfy FINTRAC’s requirements and enhance consumer onboarding experience.
Digital KYC simplified
If you want to use Digital KYC for your business, you have to consider getting an API that can be integrated into your platform and app. The API will use the bank account of the customer as a source, so you can verify the basic details, such as name, address and financial account. There are a bunch of services out there that offer Digital KYC API, but do enquire and find more on the kind of support they offer and if they are around to help with integration.
KYC compliance is not a choice, and you have to stay compliant. Going digital is the best step in this regard, and this is not just about your company and how it handles KYC, but also about getting a competitive advantage and offering a better experience for new customers.