Outsourcing has immense advantages, and incorporating that practice into steering KYC-related activities is even more beneficial.
But organisations, especially banks and financial institutions, are still reluctant to have third-party agencies handle the data of their customers, especially when all the providers aim to ensure their clients' privacy and confidentiality.
It should be noted that top agencies incorporate safety measures to uphold the privacy of their vendors and customers. Such safety nets can be validated by checking for relevant certifications. For instance, ISO-certified agencies are committed to providing information security and monitor data privacy control.
Let's look at a few benefits of outsourcing KYC solutions.
Optimise the resources
For steering KYC operations in-house, there are multiple things you must take into consideration, such as employee training, talent acquisition, infrastructure development, and more. Since the outsourcing companies provide such services, they have established a framework for managing KYC activities. Consequently, it helps you save time and resources and ensure a higher rate of investment.
Effective risk assessment
KYC solutions help circumvent potential threats while handling high-risk clients via a thorough identity verification process. It enables organisations to validate their customers' identity and other details and outline suspicious activities, which helps avoid potential threats in the long run.
Streamlining operations
The flexibility to constantly monitor and improve frauds and risks measures is high with third-party KYC providers. The AI-enabled platforms and customisation tools enable businesses to optimise the KYC process. The simpler and faster KYC process also helps enhance customer satisfaction..
Deal with the various compliance issues
Outsourcing your KYC needs can help you deal with various regulations like AML (Anti-money laundering) and avoid fines. In-house teams may encounter hurdles while assessing the requirements of a regulatory act. In contrast, third-party KYC providers are well-versed in dealing with compliance issues in multiple countries. Avoiding fines and violations is also helpful for maintaining a clean track record.
Overarching long-term benefits
The solutions and advantages outlined above make outsourcing KYC services to a third-party agency an efficient solution. Such agencies have tried and tested their methods repeatedly with multiple vendors to establish a process to deal with KYC and customer identification challenges. More importantly, the tasks are completed in the shortest time span.
For mid-sized to large financial institutions, outsourcing the services can improve the onboarding process and enhance the experience for the customer while diverting the abilities of the in-house team to deal with more complex and strategic issues.
It is also crucial for attaining a competitive edge and dealing with perpetually changing regulations in the financial landscape. Organisations must also consider the changing trends in the foreseeable future, including the effects of Covid-19. The global pandemic has made it necessary to utilise digital mediums for customer identification and risk assessment which is implausible without online KYC solutions.
