As businesses go global and digital, the risk faced by these businesses from threats like cyber fraud and theft is always present. Businesses are in the requirement to address their security concerns and diligence requirements simultaneously. Unlike traditional fraud prevention, the identity industry is faced with certain threats like identity and document fraud. Due to this, many KYC related services have sprung up that facilitate digital onboarding.
In this highly contested identity verification market, the role of a KYC provider becomes even more important. Not only are KYC providers tasked to facilitate the needs of varying businesses requirements but also regulations. Businesses are constantly in the dilemma to figure out the ideal KYC provider to go ahead with. While no KYC Provider is perfect, certain aspects should be considered for selection.
Service Coverage – businesses operating globally especially the ones with multiple offices across key regional hubs should seek a KYC provider that provides services specific to a jurisdiction. It would be discouraging for businesses to go ahead with a provider let’s say is Good with Japan but not the United States. Service providers should be able to offer services in key regions of the planet to attract global companies.
Document and Language Coverage – Being jurisdictionally complaint is different to the service capacity of a KYC provider. A provider should service jurisdictions with respect to their service capacity in mind. For example, if a company covers Japan, it should really cover their local official Identification documents and corresponding languages in order to truly show adherence, not just superficially but also practically.
Backed by Regulators – Identity Verification companies should have services and Identification procedures that are backed by or originate from the core requirements of global and domestic regulators. Like FATF and local bodies. This ensures that a KYC provider understands the importance of global and domestic Know Your Customer and anti-money laundering regulations.
Practices in-line with regulations – Identity Verification companies deal in PII data, in order to perform diligence measures required by global KYC and AML directives. KYC providers should have measures and practices employed that are derived from these regulations. The EU based GDPR, for example, ensure secure and responsible practices in data handling request on behalf of companies, empowering EU citizens in the process.
Technology usage and effectiveness – not all KYC providers are the same and utilize technologies equally. Companies should assess whether KYC providers incorporate the necessary technology that brings it at par to industry requirements. Are the KYC providers based off dated practices or automated AI based functioning? What are their verification timings, and do they incorporate Human Intelligence for last resort anomaly detection?
The employment of a KYC provider should be a mandatory priority for companies for their due diligence requirements. External providers help save time and resources for companies and specifically work on streamlining onboardings while mitigating threats. Businesses should consider a KYC provider that includes most if not all of the elements listed above to ensure greater business growth as well as ensure their compliance is dealt with operators specialized in multi-jurisdictional compliance.