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Know your customers (KYC) is a process opted by businesses to mitigate the chances of fraudulent transactions. Financial institutions such as banks have a legal obligation to conduct KYC drives and evaluate the odds of illegal transactions during business relationships. Under the traditional setup, a representative of the bank would reach out to customers, verify their identity, and collect all other necessary details.

To simplify matters for the bank as well as the customer, these days, financial institutions use a digital approach to verify the identity of their customers. This type of KYC solution leverages the latest technology trends to provide a robust banking model called the e-KYC. This article has a checklist that is to be followed while building an e-KYC solution.

Seamless Onboarding Process

The most important thing while creating an electronic KYC solution is an easy  onboarding process. They need to have a clear picture of how long they expect the onboarding process to last and if there is an alternate way to run it by the user.

The financial service provider needs to consider the fact that some of the end-users may not be tech-savvy. The system should have a clear set of instructions to not face any inconvenience in filing their e-KYC.

API Integration

If the digital solution creator wants cent-per-cent control over the onboarding process, integrating the e-KYC tool with APIs is the best option. Here, it is plausible to leverage GET and POST requests to provide a compliant system that increases conversions and gives a better user experience. Depending on the banking system's nature and the type of data that one would expect from the customers it is possible to choose the best possible API.

Think of One-stop KYC Features

Any e-KYC system will have the provision of basic ID verification. However, robust KYC software has advanced features like ongoing monitoring, transaction monitoring, EDD, and dual encryption. While building an e-KYC solution, one needs to ensure that there is no compromise on the security aspect.

To ensure no compromise to security, it is important to choose development teams that have prior experience. AuthBridge is one of the best available options as they have diverse experience in building robust e-KYC systems.

Introduce Widget Integration

While creating any digital KYC solution, go for widget integration of verification software. The intuitive nature of the widget ensures high customer satisfaction. From the developer's perspective, widget integration ensures that one does not have to worry about building the front-end of the application. That way, developers have a lot more flexibility and can design an e-KYC system that is highly safe and easy to use.

Have a Robust Reporting System

Once the onboarding system is in place, the next step is coming up with a reporting system that systematically stores the data. Here are some of the essential features of the reporting element of a KYC solution.

  • The solution needs to arrange the customer profile systematically so that the bank can easily access it as and when required.
  • There should be a provision wherein the system automatically checks the GDPR compliance of the available data set.
  • The KYC solution should have an automated reporting system wherein it can automatically send reports to the relevant authorities without any human intervention.

Conclusion

In recent years there has been an unprecedented increase in the popularity of digital transactions. With this, some people have started identifying newer ways of manipulating digital money transfers and carrying out illegal processes. That is why it is essential to design a KYC system that nips such fraud activities in the bud.

The e-KYC system of a firm will depend on its organisational structure, and there is no one-fit solution. Following the tips discussed in this article ensures that one does not deviate from the right track while tailoring an e-KYC system.

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