The advent of the digital revolution has changed a lot of things for the corporate world across the globe. Businesses are becoming more concerned about positive customer experience and the security of their data. Cybercriminals are always on the lookout for chances to take advantage of the loopholes in the security systems. In this regard, companies can take help from KYC service providers that can help them set up KYC solutions in their companies. They ensure a smooth onboarding process for the clients while saving time and resources of the organization.
KYC Service Providers: The Significance of Know Your Client System
KYC or know your client/ Know Your Customer is a service, as per the global regulations, for all the business sectors. It ensures that only genuine clients enter the database of a company and receive its services while countering identity theft and money laundering cases. The service can easily integrate with artificial intelligence and complex machine learning algorithms in order to enhance the accuracy levels and speed of the outcome. The use of artificial neural networks (ANNs) makes sure that the huge volumes of data do not reduce the quality of the outcome or else it can frustrate the clients.
Types of KYC Security Check
There are different types of KYC solutions that can fulfill the needs of modern-day businesses. Let’s have a look at these types to understand which type of KYC is the most suitable for which business.
- KYB (Know Your Business)
It focuses on the firm altogether, instead of people. This is the most suitable form of KYC for financial institutions that work with businesses like cryptocurrency ones. KYB is a vital tool for financial institutions since it helps them identify who they are working with, if they are legitimate or not, and whether they are fulfilling the regulatory requirements.
- CIP (Customer Identification Program)
It sets the base for the guidelines and the framework of the KYC, it helps to ensure the customer identity. It consists of different personal details like the name, address, date of birth, etc.
- CDD (Customer Due Diligence)
It can be further classified into two kinds: SCDD (Simplified Customer Due Diligence) and EDD (Enhanced Due Diligence). It refers to the process of obtaining information from the customer and finding out detailed information about them.
- E-KYC (Electronic KYC)
It makes use of online services and digital technology to enhance KYC. eKYC is mainly about cross-checking the documents against the official records of the government.
- PEP Checklists:
They are a crucial piece of data because they ensure that no bad actors enter the digital database of the company without in-depth scrutiny. It determines if an individual is prohibited or dangerous by carefully looking at federal law enforcement databases. The individuals who are considered dangerous are referred to as PEPs (Politically Exposed Persons) who are not suitable for conducting business with.
Who Uses Digital KYC Solutions?
Digital KYC solutions are mostly used by financial institutions that handle money in large amounts. It is crucial for them to verify their clients’ identities to protect themselves from fraudulent activities. FinTech companies majorly use KYC service providers to safeguard their digital databases from cyberattacks across the globe.
The use of KYC security checks eliminates the risks associated with different clients and guarantees compliance with AML/CFT guidelines. Companies can also see if they want to implement EDD on the client’s profile or not. The organization can also keep monitoring the profile at regular intervals.
Best KYC Provider: How to Choose the Authentic Ones?
Clients must keep in mind certain parameters before deciding on a suitable KYC service provider for their organization. Clients must make sure that the KYC service providers that they are going to follow have approval from local and international regulatory officers. The major objective of the regulatory bodies is to ensure compliance from the business sector regarding the AML/KYC regulations.
The Know your customer checklist is another important thing that needs to be considered before deciding which KYC service providers are suitable for the consumers. This helps ensure that the KYC service agents are authentic or not. If they are not approved by the local authorities, it is highly likely that their services are fake which can be highly damaging for the respective organization.
To sum up, clients must make sure that the KYC service providers work cooperatively so that the client identity verification and document authentication services work smoothly. The use of KYC service providers ensures that the companies work smoothly and provide a seamless experience to their customers. The combination of artificial intelligence and machine learning algorithms makes face verification possible. It is one of the best KYC services in the market. The use of the latest digital solutions by KYC service providers saves time and resources for the company in the long run.