KYC – Know Your Customer
Today’s Know Your Customer (KYC) processes add friction for customers and present something of a compliance quandary for businesses. All because they’re not standardised or scalable. The time to bring them up to date is now.
Are KYC processes still fit for purpose?
The intention behind KYC processes is good. But of course we’d say that – after all, knowing your customer and checking that someone is who they say they are is the reason we’re here. But it’s a big job, especially when we’re talking about protecting financial institutions and other regulated companies against money laundering – which is no mean feat.
The main problem is that there are no standard procedures for KYC, so the process can be clunky and time consuming. Requirements vary from bank to bank, business to business, and country to country. In an increasingly digital world, the case is clear for a new solution to knowing your customer – one that can be completed online without adding friction or risking compliance fines, while still accurately validating identity.
The challenges for Know Your Customer
The purpose of KYC processes is to check that someone is who they say they are. They’re designed to check against lists of prohibited users and to assess risk factors. All of which is essential to safe and secure user transactions and reduced financial fraud. The challenge is doing all those things in a way that’s guaranteed to be secure but isn’t time consuming for businesses or disjointed for customers.
Fraud prevention is the reason KYC processes exist. Their purpose is to stop bad guys laundering money, generating income through illegal means, or putting ‘dirty money’ into the system for nefarious purposes. But this is a huge undertaking, as the UN estimates that money laundering accounts for 2-5% of global GDP, and the rapid development of technology is making it easier for the bad guys to move money around undetected.
KYC processes must comply with a number of regulations. Namely AML (Anti Money Laundering) and GDPR (General Data Protection Regulation). Regulations like these are naturally a priority for businesses, especially as non-compliance can lead to costly fines, but compliance is not always easy to achieve. As regulations get tighter and technology advances, KYC processes need to get quicker, more coherent and more secure.
Completing KYC verification is notoriously demanding for customers and businesses alike. Requiring everything from passports to utility bills and bank statements for customers, to legal and tax documents for businesses, it’s a complex, inconsistent process to navigate. For these reasons and more, taking the friction out of KYC processes is long overdue.
How Callsign supports KYC verification
Callsign technology is powered by Intelligence, Policy, Authentication and Verification Engines. These are what empower us to support the fight against money laundering and meet KYC compliance standards, all while removing friction from the process for the end user.
We use thousands of data points across device, location and behavior to check that someone is who they say they are. Helping you to accurately identify people, including fraudsters, in real time.
Callsign provides accountability by default, helping businesses keep up with changing compliance standards. We do this by securely verifying that someone is who they say they are.
The Callsign Verification Engine offers eID&V, meaning our platform is equipped to check against other data sources without taking transactions offline, significantly reducing KYC friction.