The term KYC, or Know Your Customer, is being used in a variety of fields. It refers to the process of identifying and verifying the identity of customers to prevent financial fraud. According to CNBC, American consumers reported losing USD 5.8 billion to fraud in 2021, which was up from USD 3.4 billion in 2020.
The need for KYC compliance has increased due to increasing security threats and regulations. But KYC automation can help you streamline this process so that it is not just efficient but also secure at the same time.
There are many advantages of automating KYC in your organization, the first being easy compliance. Compliance is important for all organizations, but it’s crucial for banks and financial institutions that are registered with the SEC or have been given the powers of a bank by their regulator.
For example, if you’re a company that deals with cryptocurrencies, then KYC (know your customer) processes will help your organization establish good practices needed to protect against money laundering and terrorist funding.
Also, if you want to do business with banks or financial institutions in any capacity, whether it’s getting an account opened or doing transactions through one of their ATMs, every transaction will require KYC procedures which can be implemented using automated tools.
Automation is all about reducing time and cost. It also helps in reducing human error and thus makes the process more efficient. According to Business Wire, enterprises in the UK are increasing investments in automation technologies to reduce costs as the nation’s economy is going through a stagflation crisis.
Automating your KYC process means that you can have an accurate database of customers, with information including their name, address, and other documents, such as passport details, accessible at your fingertips anytime, anywhere. The automation system will also help you keep track of all the transactions made by your customers so that there is no chance for any fraud or money laundering to take place.
One of the main reasons to go ahead with KYC automation is that it helps you be more competitive. You can provide a better service to your customers, reduce costs and offer them a better customer experience.
Even if you are already doing well in this area, getting rid of traditional manual processes will make your organization even more competitive by allowing you to cut down on operational costs and simplify processes.
For example, imagine that you have just increased your customer base by 100 percent within two weeks because of the new automated KYC process that has been put in place within your organization. This means more customers but also more money coming into the organization every month.
With KYC automation in place, it’s now possible for all parties involved (customer and company) to enjoy faster processing times with no need for additional manpower or office space since everything is automated.
Customer satisfaction is a key factor in business success. The customer experience, how your customers are treated, and the quality of the service you provide all contribute significantly to their overall satisfaction and loyalty. As such, ensuring that your organization provides a secure environment for customers to interact with your brand is important.
In this digital age where data is constantly shared online and across devices, customers want reassurance that trustworthy businesses are safeguarding their personal information. They will be more likely to trust an organization if they feel confident their data is secure.
This can be achieved through KYC automation as it ensures compliance with relevant regulations while also providing optimum protection against fraudsters or hackers who may try to access sensitive information held on behalf of clients.
With all these benefits in mind, it’s clear that KYC automation is a great choice for your organization. Technology is constantly evolving, so there are new features every day. According to Polaris Market Research, the global e-KYC market was worth $447.53 million in 2021, and it is expected to grow at a CAGR of 22% between 2022 to 2029.
We hope this article has given you some information on why it might be a good idea to adopt this technology and what kind of implementation process you should expect when doing so.