These days, customers expect far more from brands and organisations than just their primary service. Consumers are made more aware of company practice and will often favour a brand that aligns to their views over cheaper or quicker alternatives.
But how can you foster loyalty in your brand? This post will explore how implementing robust and compliant KYC checks can help cultivate emotional, lasting relationships with your customers.
What are KYC checks?
Know Your Customer (KYC) is part of the process of verifying a customer’s identity. Most regulated financial markets require organisations to perform KYC checks in order to authenticate an individual.
Qualifying organisations need to verify who their customers are before they engage in a business relationship; typically, customers are required to provide credentials such as ID documents in order to use a company’s service.
These checks help companies meet KYC & AML regulations and reduce fraud. Here are some of the regulated markets which are required to perform KYC checks:
- Finance & Banking
- Payments & Digital Money
- Gambling & Social Gaming
- Retail Finance
Why do we need robust KYC checks?
Regulated firms undertaking financial activities are required to apply risk-based customer due diligence measures to prevent their businesses from being successfully targeted by money launderers or terrorist financiers. By conducting thorough KYC & AML checks, businesses can dramatically reduce the financial, reputational, regulatory and strategic risks from other entities.
Traditionally, these checks would be carried out using physical ID documentation, such as a passport or driving license. However, a customer may not have such documents to hand, causing friction in the user journey and delays the transaction process, with the added risk of fake documents being used. In fact, in September 2020 the Italian government issued a law which focused on digital KYC for anti money laundering purposes, digitising the onboarding process to provide higher rates of accuracy.
These checks enable you to gain a true understanding of your customer, whilst searching and monitoring other datasets such as PEPs & Sanctions databases to help provide confidence in your risk protection processes.
Not carrying out KYC checks when required can result in penalties by the Financial Conduct Authority (FCA) and HMRC. KYC, or performing customer due diligence (CDD), should be performed regardless of whether AML regulations are applicable to ensure customers are who they’re claiming to be.
How do they work?
To verify someone’s identity when opening a financial account in some capacity (bank, financial service, gaming account or otherwise), customers are required to provide credentials such as ID documents, personal information and biometric data. These are then matched against a number of legitimate, high-quality data sources, in order to authenticate an individual to use a company’s service.
Thanks to our comprehensive family of automated solutions, Hello Soda’s online KYC checks are quick, easy and effective. Customers are able to verify their identity instantly using a number of digital identity verification methods.
When performing online KYC checks, our solutions cross-reference data from multiple sources to give certainty in seconds. This approach helps global organisations perform enhanced due diligence (EDD), increase customer acquisition, increase revenue, comply with regulations and mitigate the risk of impersonation fraud.
How KYC checks increase brand loyalty
The initial interactions a new customer has with your business set the tone for the entire relationship; the likelihood of a customer sticking with you (and recommending you to others) increases with the level of emphasis you put on creating an excellent onboarding process.
According to a study from Harvard Business Review, ‘an increased focus on onboarding offers significant or moderate positive impact over the life of the contract for revenue, client renewals, and client referrals.’
Employing a robust and efficient KYC process will:
- Onboard customers quickly and effectively with a lower number of false positives & negatives.
- Increase approval rates by utilising a number of legitimate, high-quality data sources.
- Get customers using your product sooner, accelerating brand affinity.
- Increase customer satisfaction with your level of data security.
- Reassure customers of the diminished risk of fraud and account takeover.
The more a business knows about their customers, the more they not only build further trust within their brand but can tailor customers experiences to expand loyalty, improve overall customer lifetime value and obtain revenue retention.
How we can help
Hello Soda’s suite of KYC solutions can help onboard your customers faster and more efficiently with more accurate results. Onboard up to 68% more customers than with traditional identity verification methods, using our single universal API, Sodium.
Book a demo today and see for yourself how powerful our suite of solutions are.