Voir plus
 KYC Platforms and APIs - The Future of Compliance?
KYC

KYC Platforms and APIs - The Future of Compliance?

With the adoption of the Fourth Anti-Money Laundering Directive (AML), European Union (EU) member states have a set of rules on know-your-customer (KYC) procedures that are applicable to all companies providing financial services. These rules stipulate what customer identity information is required, how and when it should be collected, and where it should be stored.

Emilie
August 16, 2022

With the adoption of the Fourth Anti-Money Laundering Directive (AML), European Union (EU) member states have a set of rules on know-your-customer (KYC) procedures that are applicable to all companies providing financial services. These rules stipulate what customer identity information is required, how and when it should be collected, and where it should be stored. With this in mind, organizations must implement a KYC process that includes personal data collection, user authentication and user authorization. But how? With so many third-party KYC platforms available at different price points, which one best meets your needs? This article explores the ins and outs of KYC in the modern digital world - what it is and why it is becoming so important. You'll also learn about some of our favorite KYC APIs and platform solutions that can help you meet compliance requirements in an easier way.

What is KYC?


KYC is short for "know your customer". It is the process by which a company verifies the identity of its customers. This procedure is widely used in industries such as banking, investment and insurance, where there is a risk of money laundering and fraud.

This process is used to identify and verify the identity of individuals or companies who are customers or potential customers. The objective is to reduce the risk of fraud, money laundering and terrorist financing. This process is highly regulated in the banking and financial sectors.

The most important element of KYC is the verification of the customer or account owner. This can be done by asking the user to provide certain documents or by examining the account.


Why are KYC APIs becoming so important?


As we move towards a more digital and borderless economy, financial institutions are facing new challenges in their day-to-day operations. In this new digital age, KYC compliance is more important than ever.

With the growth of digital banking, bank customers now demand shorter onboarding times and digital onboarding solutions. At the same time, banks are required to comply with anti-money laundering and "know your customer" (KYC) regulations. This means that banks must now verify the identity of their customers.

Existing onboarding solutions are not suited to these processes. That's where KYC API solutions come in. They are the best possible solutions to facilitate digital onboarding.


Limit the risk of money laundering and terrorist financing


KYC helps verify a customer's identity and monitor any suspicious activity. It is a means of performing due diligence to help identify individuals who are using financial services to launder money or finance terrorism. It is likely that a person engaged in terrorism will have difficulty obtaining a bank account, as banks are required to know the origin of their funds. The same is true for money laundering: banks need to know where the funds came from. This process can be automated by using one of the KYC API solutions mentioned below. This will allow banks and financial institutions to collect and verify customer IDs and documents. The collected data can then be stored in a centralized database. This would facilitate the tracking of customers, thus providing more transparency.


Limit the risk of identity theft


Identity theft occurs when someone else uses your personal information to open new accounts, apply for loans or make purchases. It can also be used to apply for government benefits, such as Social Security. In most cases, the victim of identity theft does not know that someone else has stolen their information until they try to correct their mistakes.

The stolen information is used to open new accounts or make changes to existing accounts. This can happen when someone uses your information to open an account or make changes to existing account information.

You can apply identity verifications with KYC solutions and KYC APIs from the market like Dataleon.


3 must-have KYC APIs


- KYC-online - The most popular KYC-online API is used to verify an individual's identity through their cell phone number. A user enters their cell phone number. Using the KYC-online API, the system will send a verification code to the user via SMS. This code must be entered into the KYC-online API and the API will return the information.  

- KYC-live - The KYC-live API has a unique feature. The API takes a picture of the identity document, extracts the information and saves it in a PDF file on the server. This API can also extract information such as name, address and date of birth.

- Unified KYC - A unified KYC API is a centralized system that can be accessed by all the different departments and employees in your company that are involved in the onboarding process.

This will give you a centralized platform for all your customer data and verifications, accessible by all systems in your company. Onboarding new customers will be much easier because all the data will be in one place. Dataleon's solution.


Documents to check


While you can use these APIs to simplify the process, it is important to verify the documents submitted by the user. This will help you avoid fraudulent activity. Documents to be verified can be identified by asking the user to submit copies of their identity documents. It is important that you verify the documents against the information provided by the user.

- ID card and passport: The passport can be verified by checking the expiration date.

- Driver's License: The driver's license can be verified by checking the state that issued it.

- Proof of residence and utility bills: Utility bills, such as water and electricity bills, can be verified by checking the date of issue and account number as well as a rent receipt.

- Credit Card Statements - Credit card statements can be verified by checking the name and expiration date of the card.

- Bank Statements - Bank statements can be verified by checking the name of the account holder and the account number.


Conclusion


The Fourth Anti-Money Laundering Directive (AML) introduces a new era of compliance for financial institutions. To meet these new compliance requirements, financial institutions are exploring different KYC API solutions.

These APIs are the best possible solutions to facilitate digital onboarding. They help financial institutions verify the identity of their customers.

This helps in reducing fraud in digital loans and payments. At the same time, they help financial institutions meet anti-money laundering compliance requirements.  These KYC API solutions make it easy for financial institutions to collect and verify their customers' credentials and documents.

A PROPOS DE L'AUTEUR
Emilie

Vous avez aimé cette lecture ?

Restez au courant des dernières actualités, stratégies et informations commerciales vidéo envoyées directement dans votre boîte de réception !

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.