Enhance Customer Conversion With Compliance
With the number of new software and SaaS tools still on a rapid incline » making sure that you can convert new users into happy and thus paying customers is more challenging than ever before.
Learn how user identification can make or break your expansion goals in an 8-minute read.
Unless your intrigued users are welcomed with a familiar and easy (both in terms of navigation and comfort) onboarding sequence, they won’t hesitate much to look around at the often dozens of alternatives.
That is why as a business aiming for sustainable growth in 2022, you have to make sure, that your:
- compliance and legal teams
understand, that your user identification sequence » as an unavoidable part of your onboarding, has way more influence on your growth equation than for it to be handled like a dry regulatory obligation.
A quick recap of what KYC is and how it is usually built up [you can skip this part by clicking here]:
Know Your Customer is a part of Customer Due Diligence, which is the umbrella term of a set of regulatory requirements/legal obligations and some suggested practices in the pursuit of creating a safer environment for both businesses and their customers.
KYC can consist of a variety of steps as part of identifying/verifying users before they can use a service, or some parts of a service (for e.g. you might be able to set up your account, but would not be able to get in contact with other users or conduct financial transactions).
From a regulatory standpoint, a business must conduct the following::
- Request: Proof Of Identity, Proof Of Address, Proof of Date of Birth
- Run verification sequence on received data » e.g. check the person submitting the data, by requesting a picture/liveness test, video call etc.
- Run Anti Money Laundering checks if necessary
Like it or not, Know Your Customer processes are not only here to stay with us, they are spreading through industries like wildfire.
While for now, as a regulatory requirement these are mostly focused on financial technology solutions, as a reassuring/protective precautionary measure they are already used in a variety of industries »
from eCommerce platforms, through car dealerships to even online dating platforms.
It is highly likely that soon these measures will be either required or at the very least expected by users of any platform where online transactions happen.
In general, one might look at KYC measurements as a simple nuisance to be handled.
After all, what is there to overthink about matching someone’s data against a few databases and making sure they don’t pose harm to either your service or your other customers?
However, once you connect the dots between the facts that:
- 1st impressions with a product/service have a significant effect on future use
- KYC processes are a key element of your onboarding sequence and thus a major part of your users’ 1st impressions
- Your users can quite easily choose from a dozen alternatives
it’s easy to see how messing up KYC will inevitably have dire consequences on your growth potential.
…and we haven’t even addressed the fact that a subpar KYC solution will expose your business and your customers to fraudulent users.
On a basic level, most KYC solutions (no matter if online or offline) offer the same sequence.
Your users will have to
- have some form of identification ready for a check (with their data checked against databases),
- as well as in some cases show their faces to match the ID
Sounds simple enough…
Yet often the sequence users are exposed to is far from simple.
Not to mention the quality of the results of the process.
It is not only a question of speed.
Some processes are extremely fast, yet are still inconvenient, inefficient and ineffective.
Having someone go through a few questions via a phone call can be done in a few seconds.
But not everyone can or would like to deal with such phone calls. Plus the level of security is rather low when all you do is call a number and ask a few, often easy-to-answer questions.
Similarly, on the other end of the spectrum, the measures you choose may be highly secure.
But if they require your users to do the equivalent of a cartwheel with a roundoff backflip in terms of intuitiveness, they’ll likely choose an easier alternative.
It is often difficult to judge whether your sequence is challenging or not.
Until you have to go through it, it may seem rather simple.
A phone call and an email are not the ends of the world. Neither is retaking a picture of your ID card 2 times due to unclear instructions or bad light conditions.
…most will also survive a trip to a kiosk for a personal check-up after a manual verification process through their phones.
The question is, are there easier, more convenient choices?
Even if your users can do all of the above… would they?
And lastly, if you would, do you think you’d be happy about it?
The point of a great KYC sequence is twofold.
On the one hand, your goal is to make sure your sequence is sophisticated enough technology-wise, that it can both protect your business and provide a secure experience for your customers.
It needs to be able to do this:
- Because you won’t be able to retain your customers if they are exposed to fraudulent users
- Because your business can be required to adhere to certain regulatory requirements such as AML check, subject to penalties
On the other hand, you should be aiming for a sequence sophisticated enough, that it is effortlessly simple for your customers to go through » without the need for corrections and redos.
Effortlessly simple is in no way a set of buzzwords here.
It should literally be a sequence that they barely notice on their journey to using your service.
Because while user identification is a crucial part of your conversion efforts, as it is among the very 1st features of your service that your users are exposed to.
It still is a means to an end, as your users’ end goal is using your service.
As such it needs to be a set of familiar, intuitive, clear steps that one can swiftly get through.
So then, what should you focus on when it comes to enhancing your conversion rate by optimising your onboarding sequence?
First and foremost, the key thing to keep in mind is that your sequence should be highly sophisticated both technologically and experience-wise.
Whether you decide to do everything in-house or obtain external expertise, you want to be sure that the result will be an easy yet secure sequence.
While technological improvements can and do enhance elements of our lives regularly… sometimes the more is not the merrier.
Of course, some tech features play a crucial role in a KYC process. Yet some buzzwords thrown around in the tech industry are as insignificant for an excellent KYC measure as adding a cute picture of a cat to it.
But let’s focus on what you need to up your conversion numbers instead of what you don’t.
You need a KYC solution that:
- Can handle a variety of identification forms »
your customers’ IDs will differ vastly from one another and one customer may have more than one ID at their disposal.
- Can parse the letters of all potential languages used on IDs »
without an excellent OCR, no matter how good the face recognition solution or how many ID cards one can check, there’ll always be issues with the recognition of names.
- Is flexible enough to be integrated with your system without any difficulties »
If you’ve got trouble with the integration, you are more than likely not the only one. As long as they have to figure out integrations, how much time will they have for other maintenance?
- Provides a familiar, frictionless user interface »
Simplicity is the ultimate sophistication.
- Can keep up with new fraud »
Besides the easy front end, you need a robust backend to keep your business and customers safe.
Above all, you need to integrate a KYC solution that is not only created by experts who understand complex technology »
but by ones that understand the importance of KYC in your customer conversion efforts…
and who knows that to turn intrigued users into happy customers, one needs a sound balance between a fun user experience and a versatile, proven, secure system.