Most regulated markets, certainly in the financial services world, require organisations to perform Know Your Customer checks (also known as KYC). Adhering to these regulations and maintaining compliance can be a costly process, especially if that process isn’t automated.
KYC can be challenging for organisations of all sizes but is especially daunting for small to medium-sized businesses. If you are an SME business you need not worry, there are some simple and effective ways to comply with KYC and AML mandates – without breaking the bank.
Understanding the challenge of KYC
Within Europe alone there are approximately 25 million small to medium-sized businesses, which accounts for 91 percent of all businesses in Europe.
Performing effective KYC checks certainly has an impact on SMEs when you consider most major banks spend over 15% of their budget to support regulatory compliance and governance. With SMEs having less revenue and fewer staff resources it becomes crucial to use automated and cost-effective methods to meet KYC compliance.
A word of warning; not all providers and methods of performing identity verification checks are equal. It’s a risky move to simply select a provider as they offer the cheapest option. It’s also risky to select a manual or traditional verification method as they rely on static data sources which become outdated quickly.
Technology & automation is the key
The worry is over – there are ways SMEs can overcome the challenge of performing efficient and robust KYC checks as easily as larger organisations. Many of the associated costs when performing ID checks come in the form of labor. These can include staff costs when manually reviewing documents or hiring new staff to cover the demand. The key for SMEs is automation. By instantly performing KYC checks can reduce the cost of compliance by up to 70 percent.
Cost isn’t the only benefit of automation. Instant checks also ensure data sources used for verification are up-to-date. In addition, platforms like Sodium can enable SMEs to gain more customer insights by cross-referencing all data sources which can result in enhanced due diligence (also know as EDD) and help to deliver more personalised experiences.
To perform adequate and enhanced KYC is no mean feat, but SMEs don’t need to take on this challenge alone. Leveraging technology and platforms like Sodium can enable businesses to quickly and confidently verify the identity of their customers, so they can focus on business growth. Smaller businesses don’t need to be left behind if they take advantage of the new wave of technology helping perform appropriate KYC and AML compliance.
How can we help?
We offer a wide range of automated KYC solutions which can help businesses of all sizes. Contact us today to find out how we can help your business.