How to Implement an Online KYC: Best Practices, Recommendations and our Lessons learned
Have you ever considered how much time a new client spends opening an account at a bank? And how much money do banks spend to onboard every new client? The journey, paperwork, and approval process, not to mention the expenses of renting space for the branch and staff salaries.
All these make the process of connecting a new user to the bank’s system extremely complex and costly. Especially considering that sometimes people just open an account and either don’t use it or do so very infrequently. All this turns into losses.
Is it possible to avoid this? Yes. Progress pushes all business sectors towards development, and the ability to provide services remotely is one of the trends.
KYC, or Know Your Customer, is a process of verifying a client’s identity, conducted by financial organizations and other companies providing financial services. Typically, this occurs after a client has visited a bank branch and applied to open an account or perform a major transaction, but is it possible to do this online? Yes.
An Online KYC – The Best Solution
During our audit of the bank’s digital systems, we noticed that a great deal of resources are devoted to user verification and identity verification procedures. But how to automate the user verification process as much as possible, thus expanding the possibilities of registering new users and identifying already registered customers?
This led to the customized Online KYC solution.
The Online KYC is a solution for conducting Online KYC checks for both existing and new bank clients. Thanks to advanced technologies, users can easily confirm their identity and meet regulator requirements.
The platform supports various verification methods, including FaceID, scanning and recognizing identification documents, as well as integration with external public document verification services. Thus, users can choose the most convenient and effective verification method for themselves.
Steps for the Online KYC process can be adjusted for the specific case. This system offers banks the ability to customize the verification process to meet the unique requirements of different types of clients.
- Customization of the Online KYC process. We understand that client needs can vary significantly. For instance, the verification process for a sole proprietor may differ from that of a large corporation. Therefore, our Online KYC platform allows banks to tailor the verification process to suit the specific needs of each client or client group.
- Flexibility in verification methods. Moreover, banks can choose from a variety of verification methods – from FaceID to document scanning – to ensure an optimal balance of security and convenience for their clients.
- Privacy protection. At the same time, we continue to provide a high level of protection for confidential information. Clients can be assured that their personal data is securely safeguarded.
The Implementation Process
To counter all the bank’s challenges as the first step we implemented a FaceID system, integrated with a national identity database. This allowed us to match the photo from the client’s official documents with the data captured during the face recognition process, ensuring the person conducting the transaction was the legitimate account holder.
To reduce the burden on bank staff for personal identification of clients we expanded this technology for annual customer screenings. Regulatory requirements mandate clients to update their information periodically, a process often seen as cumbersome by many who were reluctant to visit the bank for this purpose. This reluctance led to operational difficulties for the bank, sometimes necessitating transaction blocks, which inconvenienced customers.
The adoption of the solution in a bank was straightforward. We used simple, visual step-by-step guides to explain how the system works, making it easy for clients to understand and embrace.
On the bank’s side, the implementation was led by the product manager of this initiative, who collaborated with their in-house team, including marketing for brand book verification, compliance, and legal departments.
Victories and Results
The implementation coincided with the transition to cashless branches. This shift led to a significant change in branch operations: staff who previously handled routine transactions either upgraded their skills to advise clients and handle major transactions of 5,000 euros or more. Consequently, physical bank branches evolved from transactional hubs to advisory centers, focusing on upselling and servicing major clients, with day-to-day transactions moving online or to branch terminals. In most branches, staff numbers were reduced from six to one, responsible for handling significant transactions.
To date, some banks have implemented our solution and, in addition to simplifying the remote user verification function, which has opened up new groups and audiences to work with, we have been able to improve security and reduce fraud.
But what turned out to be most pleasant for clients – no more unnecessary visits to open an account or for annual user verification. No more lengthy trips to the branch and much less bureaucracy.
And a satisfied client, as is well known, always brings in revenue.
Want to learn more about our solution? Leave a request and we will tell you all the details.
