eKYC Common Practices – Selfie, AML Solutions Online
With the rising popularity of digital payment apps and internet banking, Electronic Know Your Customer (eKYC) systems have become increasingly important for maintaining service quality and payment authentications across the globe.
However, while eKYC growth has moved away from the days of physical forms and passport-sized photographs, eKYC is still a significant pain point for many a company in converting leads into customers. In a 2016 survey, 89% of corporate consumers did not have positive eKYC experiences – primarily due to changing regulations and, most importantly, inefficient eKYC systems.
In this post, we explore what eKYC is, who uses these systems, and how investing in an efficient system like TRUSTDOCK’s can create a ‘gateway to happiness’ for both your company business and clients alike.
What is eKYC and who uses it?
When one emphasises a need to ‘know your customer’, what does that really mean?
To start, it’s a stage before new customers starts an account where a business performs verification to determine if a person is who they claim to be. In the past, this used to be filled with many, many forms collecting different information, pictures, addresses and the like, and would take a long time to process.
eKYC is an electronic version of this traditional onboarding stage for any business that needs to verify a customer’s identity in a sensitive industry. These include transactions with financial institutions, investment, banking, and wealth. It usually consists of several common practices:
- Various Online Forms – To collect basic identifying information for users, such as name, address, occupation, and social security number
- Identity Verification – Including selfie and video verification, coupled with government-issued documents, such as national IDs
- Two-factor Authentication – Verifying user identity and reduce risk of fraud
- Anti-Money Laundering (AML) Monitoring – Behavioural monitoring to prevent illegal financial activities
Depending on the nature of your business, you might need different procedures or levels of access, but the general idea is the same.
Issues with Current eKYC Processes
While eKYC processes are born from a need to comply with regional and national regulations, there are still many barriers that prevent it from being the seamless alternative to traditional KYC processes.
Slower than Expected
To begin with, though eKYC processes were meant to digitise and quicken KYC processes compared with traditional paperwork from 5-7 working days to near-instant speeds, this is unfortunately still not the case for many services due to many factors. From customers not complying or submitting proper documents, to company or system-side issues such as inconsistent data collection and incompatibility with legacy systems, many existing eKYC initiatives have not been as seamless as previously thought.
In addition, while compliance costs for ever-tightening regulations increase, banks and financial institutions are finding it harder to keep up, as eKYC processes are often not their area of specialty.
Potential leads also often find themselves turned away by these inefficiencies in the eKYC process, often leading to them not converting to customers because of technical and human errors. Imagine downloading a payment app and going through 15 pages of document uploads and selfies before you make your first payment.
That’s a bummer.
KYC and eKYC processes are, by definition, tedious processes borne from the need to safeguard consumer and corporate interests.
Despite the urgent need to incorporate eKYC processes and keep up with evolving technology and regulations, transitions towards digitalising processes take time and effort for companies to adapt to. High transition and training costs, coupled with unfamiliar infrastructures and habits formed from using legacy systems, all cause reluctance to switch to eKYC, or continue streamlining eKYC processes.
In the end, employees or customers directly involved in eKYC might go through the motion, without troubleshooting or reporting any issues or points for improvement.
And then as competitors continue to make their eKYC processes more efficient, your company starts to lag behind.
That’s not worth it.
eKYC as a Gateway to Happiness
At TRUSTDOCK, we believe that eKYC is a gateway to happiness – for both your customers and your company, and that’s how critical the onboarding process is to us.
Efficiency is Key
While the main purpose of eKYC is to prevent fraud, it is equally important that from the very start, your service brings the most value to the customer as efficiently and seamlessly as possible. Less friction during the onboarding process means a customer who reaps value from you from the get-go, which means happy customers and thriving business growth.
An efficient and frustration-free UI, coupled with an intuitive and easy-to-use flow is extremely important in eliminating negative customer experiences. In addition, eKYC can help you and your associates perform faster customer services, and make your customer support infrastructure more efficient and robust.
Therefore, eKYC is a lot more than an afterthought for complying with regulations, it’s an essential step that strengthens your business value proposition for your leads and customers.
eKYC is not just about complying with financial regulations – it’s the first step and a gateway for happiness and good business growth, especially in the near future where customers continually expect faster and more accurate services in the digital age.
Understanding how eKYC positively impacts a company’s onboarding process enables both you and your customer to transact in a more secure, error-free environment than ever before.