What are the two oxy-morons that go betters with one another than idiotically dangerous? Not many I presume, anyhow the definition of an oxymoron is putting together two words opposite in meaning to define a noun such as “complex simplicity”, and many others. Now although this is a literary term, it is perfectly suited to define the topic. The topic in itself is the perfect example of an oxymoron: it describes a situation that is unlikely to happen but there exists perfect irony. Imagine having your privacy being impeded via KYC. Highly unlikely, but it doesn’t guarantee anything either, in recent years there have been many incidents that have left question marks on the KYC process due to data loss and data breaches.
So how best to proceed with KYC that not only adheres with the latest and directives keeping not only the sanctity of the organization safe but also the personal and private data of their client safe also.
KYC – Know Your Customer
The KYC process or Know Your Customer is another name for customer due diligence where a customer, partner, or any other entity has to go through a series of checks to prove identity. In the past, the entire process was done manually and in doing so an entire department was allocated with many resources. Even though it is the most important department with probably the most sensitive data exposure the results were seldom up to the mark. This caused a hiccup for operations to run smoothly, the onboarding process took days even months. There has always been talking of migrating to an online solution so that the process is not only fast but also reliable when it comes to results. The accuracy rate of AI-backed KYC processes is reported as no less than 98.67%. These types of numbers encourage vendors to migrate not only at the earliest but also with confidence. Not only does this mitigate human error but it is also cost-effective.
Outsourcing KYC is the key
The traditional method of KYC involves a lot of paperwork and time, a tedious customer experience. The modern digital way only requires a solution, global KYC providers have aced in providing accurate and cost-effective services to clients. Now for organizations that have an in-house challenge, it might be difficult to perform an extensive KYC check i-e KYCC. This is why the better and smart choice will always be to outsource the entire process and use the capital elsewhere. A good or seamless customer experience goes a long way when it comes to business and trust-building. Outsourcing this process will allow you to perform effective, extensive, and enhanced KYC without putting strain on your own capabilities.
The AML/KYC directives are an added pressure on the fintech and banking industry. The financial regulatory authorities demand financial organizations to have a strict outlook. They are asked to perform extensive and enhanced background checks in order to onboard a customer or provide loans. Every financial action is backed by a background check. The participating entities must be clear of any such accusations regarding anti-money laundering or terrorism funding and they must not be accused or involved in any illegal activities. The entire process is made to make sure the entity is not involved in any such illicit activity that would in the future scar the reputation of the organization. Whereas growing money laundering and terrorist funding call for stringent policies when it comes to id verification.
The next step into the world of KYC is the adherence to various global data compliances, there have been examples recently where organizations have suffered from sues by customers on account of the data breach.
The pandemic has brought with it a new threat of privacy breach, with enhanced tech now easily available, fraudsters have evolved twofold in terms of frauds and ID theft. The provision and availability of tech to everyone unbiased the implications of it in the wrong hands is certainly something to fear from. This is no secret that 2020 has been dubbed as the worst year economically as well as data protection-wise. There seems no respite in terms of fraud attempts and ID thefts although with stringent policies intact it has now become pretty difficult to perform an all-out scam without being caught.
Although a sector of society might feel hard done due to the stringent policies in place for performing certain financial functions, however, one cannot ignore the fact that these policies are for the greater good. Ignoring KYC in this time and world is a conscious invitation to fraud and unnecessary risk of a data breach which results in millions of dollars in fines and sanctions. The automated KYC process has made life easy for both vendors and users as there are no more manual checks involved and the results are accurate and are provided in real-time.