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API KYC and Onboarding KYC, The Complete: What You Need to Know
KYC

API KYC and Onboarding KYC, The Complete: What You Need to Know

Know Your Customer (KYC) processes are a critical part of onboarding users, service providers, and other entities that interact with an organization. However, because KYC processes are often complex and sensitive, they require special attention. If a user is unable to complete their KYC process in a reasonable amount of time or become frustrated by the process itself and leave the platform — a company risks losing that user forever. Thus, it’s essential for developers creating APIs to understand and implement effective KYC onboarding processes.

Emilie
August 23, 2022

What is API KYC?

API KYC stands for ‘Know Your Customer’s identity. In other words, it’s the process of identifying who the person behind an application or request is. This process is used in a variety of contexts, including banking and financial services, healthcare, travel, and government services. Every organization has its own particular rules and regulations when it comes to accepting new customers. In the case of APIs and other digital products, KYC is necessary as a risk management tool. It helps organizations mitigate the risk of working with unknown or potentially fraudulent customers by verifying their identity and address.


What is Onboarding KYC?

The process of onboarding a customer into your product often begins with the customer completing their identity verification (KYC) process. Once a user has completed their KYC process, the next step of onboarding is to invite them to your product. In an API context, onboarding KYC is the process of bringing a user from the KYC process (where they provide authentication details and possibly other information) into your API. This is usually done by sending the user an invitation to access your API.


Benefits of effective onboarding KYC

The benefits of effective onboarding KYC processes include: - Improved User Experience (UX): Good onboarding KYC processes result in better UX. They reduce the friction that users experience while completing their KYC process. This, in turn, leads to the user feeling more comfortable and confident with your product. - Reduced Churn Rate: An effective onboarding process will reduce the number of users who leave your platform due to frustration caused by a complicated KYC process. - Faster User Adoption: An effective onboarding process will allow you to onboard new users faster. This, in turn, helps you avoid reaching your monthly capacity limit that could otherwise result in your blocking or limiting new users. - Improved User Retention Rate: An effective onboarding process will lead to higher user retention rates. This, in turn, has a positive impact on your product’s bottom line.


Types of Onboarding KYC processes

There are three main types of onboarding KYC processes. These are manual, semi-automatic, and fully-automatic. Manual onboarding KYC processes require manual input of the user’s authentication data and other information into a web form or database. In some cases, users might also be required to email a scanned or photographed copy of their identification document. Manual onboarding KYC processes are the least efficient and effective among the three types of onboarding KYC processes. They are also the least secure since they don’t use any form of automation. Manual onboarding KYC processes are suitable for products that don’t require a large number of customers. Manual onboarding KYC processes are also suitable for small-scale businesses that are just starting out and don’t have the resources to automate this process. Semi-automatic onboarding KYC processes use manually inputted data from the user to trigger the generation of an API key.

The user might also be required to manually email a scanned or photographed copy of their identification document. Semi-automatic onboarding KYC processes are more effective and efficient than manual onboarding processes. However, they are less effective than fully-automatic onboarding KYC processes. Semi-automatic onboarding KYC processes are suitable when you want to onboard a limited number of customers or product users. Fully-automatic onboarding KYC processes are completely automated. They require the user to provide their authentication data and other information once. This information determines what happens next. Fully-automatic onboarding KYC processes are the most efficient and effective onboarding KYC processes. They also have higher security as compared to semi-automatic onboarding KYC processes. Fully-automatic onboarding KYC processes are suitable for products with a high number of customers. They’re also suitable for businesses that want to onboard new users as quickly as possible. Semi-automatic and fully-automatic onboarding KYC processes are also suitable for small and large businesses alike.


The importance of making your onboarding process user-friendly

Not only does a user’s experience with your product affect their opinion of your company, but it also significantly affects their decision to use your product in the future. If a user has a frustrating experience with your onboarding process, they’re likely to leave your platform and never return. This is bad not only for that user but also for your business in general. In the API context, an onboarding KYC process is one of the first interactions a user has with your API. Thus, it’s essential that you make it as user-friendly as possible. A user’s first impression of your API is based on the onboarding KYC process. This process is often what determines whether a user continues using your API or not. That’s why it’s essential to make it as user-friendly as possible.


3 Tips to make your onboarding process more user-friendly

Once you’ve decided to implement an onboarding KYC process, there are a few things that you can do to make it more user-friendly. These include:

- Keep it Simple: Don’t make your onboarding process too complicated. While you should incorporate enough security measures to prevent fraudulent users from using your API, you also need to make sure that legitimate users can easily complete their onboarding KYC process. Manage your expectations: Don’t expect every user to use your API within a short period of time. Most users will take their time to become comfortable with your API and use it regularly. Keep it up-to-date: Make sure to keep your onboarding process up-to-date. Every business changes over time, so you need to make sure that your onboarding process is flexible enough to accommodate those changes.


Conclusion

API KYC is the process of identifying who the person behind an API request is. This process is used in a variety of contexts, including banking and financial services, healthcare, travel, and government services. In the case of APIs, KYC is necessary as a risk management tool. It helps organizations mitigate the risk of working with unknown or potentially fraudulent customers by verifying their identity and address. The process of onboarding a customer into your product often begins with the customer completing their identity verification (KYC) process.

Once a user has completed their KYC process, the next step of onboarding is to invite them to your product. The benefits of effective onboarding KYC include improved user experience, reduced churn rate, faster user adoption, and improved user retention rate. The importance of making your onboarding process user-friendly is that a user’s first impression of your API is based on the onboarding KYC process.

A PROPOS DE L'AUTEUR
Emilie

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