KYC is an unavoidable necessity that comes with many challenges and moving parts. Fortunately, with Under, you get access to the best KYC solutions to unlock the power of KYC and protect your business from fraud and regulatory fines.
What is KYC
Know your customer, or KYC, is an essential part of modern business. Financial service companies must verify the identity and financial status of their customers, and this is accomplished with KYC. KYC prevents fraudulent activity, and it is an especially important component of anti-money laundering regulations.
Unsurprisingly, regulators require financial service companies to adhere to certain KYC regulations to ensure adequate security. Companies must gather and verify information about a customer's identity in the onboarding process, such as name, birth date, address, and identification number. From here, companies then need to check for suspicious activity or sources of funds in the customers' financial accounts.
Additionally, these records must be continuously updated to ensure that companies do not have customers engaging in fraudulent or suspicious activity. If any issues arise with an existing customer, companies must report these findings and take action to prevent fraudulent activity. All of this information allows financial services companies to craft an accurate risk profile of clients.
KYC Challenges
There are many challenges financial companies face when trying to adhere to KYC regulations. These challenges are reflected in the sheer number of fines faced by companies that are unable to accomplish adequate KYC protocols. Billions of dollars in penalties occur every year as companies struggle to meet minimum KYC requirements.
Companies and financial institutions are put on the back foot as they must react to potential or current customers. This is due to the fact companies need to first collect data, analyze it, and then act. Such a process makes it very difficult for companies to be proactive when it comes to KYC regulations.
Additionally, despite the purpose of KYC being the prevention of money laundering, fraudsters, and criminal actors are able to accomplish money laundering. With hundreds of billions laundered annually, it is evident that better solutions are needed to prevent money laundering.
Further complicating all of this is the time and effort required by companies to properly complete KYC. It takes a significant amount of time and resources for companies to verify customer information and remain compliant with all the regulations, which can vary between jurisdictions. Unsurprisingly, many companies, especially smaller ones, need help implementing KYC and struggle with higher degrees of human errors and fines.
AI and KYC
AI has incredible potential to transform the entire KYC process. With AI and machine learning, financial service companies can conduct data analysis in real-time. This allows companies to check a variety of data sources and catch fraudulent or risky activity as early as possible, making it far easier to prevent fraud and avoid costly data breaches and fines.
Another useful feature of AI is false positive reduction, which allows companies to save even more time by chasing down false alerts. KYC regulations are constantly being updated and can be very different depending on jurisdiction. But with AI, companies can have their KYC automatically updated to new regulations and adapt to specific local laws.
Companies can also dramatically reduce the risk of costly human error. The increased speed and efficiency allow financial services companies to provide a smoother customer experience. Additionally, with AI, companies can easily turn to third-party companies to provide their KYC system. This allows financial service companies to focus on their service rather than the nuts and bolts of KYC.
Underwriting and KYC
Underwriting and KYC are challenging to separate. KYC plays an invaluable role in allowing underwriters to assess the risk of potential customers properly. KYC enables underwriters to verify the identity of potential customers and understand what the customer does for business.
Without KYC, underwriters cannot justify proceeding with a potential customer. They must have a verifiable identity that is not associated with any risk actors or businesses. Additionally, KYC solutions, especially automated ones, can dramatically speed up and improve the underwriting process. This frees up underwriters to focus on more complicated problems and provide reliable and holistic risk assessments of potential customers.
Our KYC Partners
Ekata
Ekata by Mastercard enables financial institutions and companies to create accurate workflow estimates for new customers. Low-risk customers are sent through on a more streamlined path, while higher-risk clients have more verification checks. KYC needs the most innovative solutions, and with Ekata, you get solutions designed to go above and beyond traditional KYC. With Under you can access Ekata's email and phone verification features, allowing you to accurately verify a client's contact information.
Ekata has geared their KYC solution towards efficiency, allowing smaller companies to implement robust KYC quickly. Additionally, Ekata is designed to be dynamic and adaptive to more easily deal with sophisticated fraud, which is essential. Customers have found Ekata to be incredibly helpful, and many companies that use Ekata have seen significant decreases in customers abandoning their applications.
Iovation
Iovation, a TransUnion solution, allows companies to check device reputation and ensure that the device is not associated with suspicious activity. With a database of over 3 billion devices, most customer devices can be checked with Iovation. Financial service companies are also able to provide additional friction to customers who are higher risk without increasing friction for all customers. This allows for security and a smooth and customizable customer experience.
With Iovation, companies can easily verify returning customers without having a false positive. These returning customers may have changed some of their key identifying information, such as address, and Iovation makes it straightforward to check these changes in data. Iovation accesses tens of billions of fraud reports, which allows companies to be more reactive when it comes to fraud.
IDology
IDology's ExpectID is an invaluable tool for companies to maintain quality KYC. ExpectID collects data from numerous sources, allowing companies to validate identities in real-time and stay ahead of fraudsters. The data sources used by ExpectID are chosen to allow companies to verify identities from hard-to-identify populations, allowing financial service companies to offer their services to a wider customer base. ExpectID is highly configurable, allowing you to set up the ideal KYC workflow for your business.
A multi-layered approach is central to ExpectID, enabling you to provide customers with a customized KYC experience rather than a clunky attempt at a one-size-fits-all solution. You can apply extra checks and verification only when necessary and dramatically reduce friction on customers. The easy adaptability of ExpectID allows you to react to changes in regulations or new challenges to security.
ID Analytics
ID Analytics, a LexisNexis solution, provides companies with some handy KYC features. You can access millions of prepared profiles of individuals and companies that have already been vetted and are updated daily. Financial services companies can get an all-in-one risk assessment of a customer and inform them of the likelihood the identity might be fraudulent. This allows underwriters to confidently ensure the legitimacy of the customer they are assessing.
Companies can also easily isolate customers that have high-risk profiles, and ID Analytics makes extensive use of AI to allow for a more streamlined process for underwriters and customers. With ID Analytics, companies can conduct quality KYC for customers from over 30 countries, allowing companies to serve an international client base. Uncovering hidden information and risks, such as ultimate beneficial ownership and relation to sanctions, is easy.
KYC with Under
All of our KYC partners are excellent solutions for companies to implement KYC, but rather than accessing just one, you can access all four with Under. No need for separate subscriptions and logins but one integrated system for excellent KYC with Under. Considering the high rates of fraud and costly fines, financial institutions and companies need redundancy with KYC. That is the strength of Under as rather than having one layer of KYC solutions, you get four and true redundancy to protect your business from fraud and fines.
Under provides more than KYC. We also have excellent KYB solutions, application building, PDF mapping, and many more useful features. Here at Under, we strive to provide the best customer onboarding and underwriting system. That is why we give your underwriters access to a whole KYC toolbox rather than just one solution and unlock the true power of KYC. Your company deserves a secure and adaptive system to onboard customers, and that is what we here at Under have created.
