How can digital identity solutions help organisations implement a successful eKYC programme?
- The increasing demand for digital products and services, including in financial services, has prompted businesses in search of growth to tap into the global marketplace.
- As corporations, including fintechs as well as legacy financial institutions, look to expand their international footprint, the need to better understand the remote customer and verify a business relationship to ensure it conforms to internal compliance as well as external regulatory norms is more important than ever.
- The right electronic KYC (eKYC) solution can enhance a company’s ability and agility in meeting a variety of compliance obligations in a diverse region like Asia Pacific with technology doing most of the heavy lifting.
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In the years leading up to the COVID-19 pandemic, the marketplace was already experiencing a digital reinvention. As the pandemic took hold, reshaping the way business was done and forcing workforces around the world to adopt remote working, the pace of digitalisation has been transformed.
More businesses are going online all the time and, as domestic markets become more competitive, are looking to grow their operations in foreign markets. This means that everyone – from the largest banks and financial institutions to the smallest and nimblest of fintechs and crypto firms – needs new digital strategies to manage customer relationships as well as to meet security and compliance requirements across international borders.
The challenges are further compounded for businesses operating in Asia Pacific, a region characterised by diverse jurisdictions governed by a mosaic of local and regional guidelines and legal frameworks.
Getting cross-border KYC right is a balancing act that makes unique demands on an enterprise’s compliance function – and there are no shortcuts. Organisations seeking to operate securely across international borders must aim for the highest possible standards.
The eKYC proposition
Moving to an eKYC solution gives an organisation the opportunity to update its customer experience, providing a modern front-end user experience while integrating, or even retiring, outdated legacy systems. A digital solution also provides corporations with a priceless source of centralised customer data.
Further, the economic impact of the pandemic means there’s a growing need to balance headcounts and manage costs while maintaining a sound compliance framework.
An electronic strategy, once integrated into a company’s workflows, is well placed to help with that paradox by offering an automated, efficient and wide-reaching functionality.
Companies looking for a quality eKYC solution must have a detailed roadmap, including an appropriate budget at the outset.
There are many solutions to choose from, which provide a range of features – including secure, real-time verification checks, risk assessments and rapid customer onboarding – in a way that greatly contributes to a firm’s capabilities and agility, allowing it to compete in an international marketplace.
And while there are appropriate digital solutions available to match all means, it’s worth remembering – in the context of weighing the benefits against the costs – that an ounce of prevention really is worth a pound of cure.
However, devising an appropriate eKYC strategy can be a challenging proposition, which explains why many firms struggle to successfully implement an effective and efficient programme that fulfils all their requirements – as a recent poll of respondents attending a Refinitiv webinar attested to.
So, what considerations should organisations looking to implement an eKYC programme be mindful of?
Devising an effective programme
A solid compliance foundation and framework, with appropriate controls, cross-border data privacy standards and a commitment to good governance, are essential to begin with.
How to access, verify and standardise information and data, especially on a global scale, must be worked out with care in terms of the solutions available. Any eKYC programme’s success is dependent on the quality of the underlying data.
Further to that, when considering an eKYC technology offering, it is important to look at its reporting capabilities alongside its digital identity, verification and risk-processing potential. Such reporting functionality might range from providing companies with invaluable customer data to actually filing submissions to regulatory bodies.
Regulators are increasingly monitoring commercial activity across international borders, and their demand for reporting and information is growing all the time. An effective KYC solution must be dynamic enough to adapt to and meet evolving regulatory requirements.
That being said, regulators are also becoming more aware of the tracking and monitoring capabilities of electronic solutions, their ability to provide audit trails and their potential to be more secure than paper.
From a technology perspective, the options available are becoming more flexible, and easier to deploy and integrate with legacy systems.
However, enterprises must carefully consider their requirements before choosing a technology provider: a proven record of software delivery, tools customisable to your transactional requirements, relevant international experience, and the ability to provide support across worldwide locations, are all critical factors. Because, with the right kind of technology platform, business processes and operating models can be standardised and deployed on a country, regional or global basis.
What a market-leading eKYC solution offers
A typical eKYC offering from a high-quality technology partner will include a comprehensive four-step process, which offers speed, efficiency and accuracy, alongside security and safety.
First, there’s document authentication. This involves confirming the legitimacy of an applicant’s submitted documents, using machine-learning algorithms. The second step covers passive liveness and facial matching, to ensure the person is real, and also comparing a current facial image with the photograph on an ID document.
Then comes identity verification. This step means verifying the person actually exists and is who they say they are, by comparing information from various trusted sources.
The final step is risk screening. This is comprised of supplementary checks against a proprietary database unique to that provider. Such additional screening may include further ID checks, proofing legal documents, and other regulatory and financial risk validations.
A solution such as this will also supply connectivity to global pools of quality data and risk information, highly sophisticated automated identification capabilities, data privacy and high-speed turnaround at manageable costs, along with the flexibility to be easily tailored to the needs of a global business operation’s evolving requirements.
Having a modern technology-based solution of this nature to ensure KYC compliance is an invaluable asset for businesses looking to thrive in the highly competitive international market that we see today.