Who doesn’t remember the COVID-19 pandemic and the seemingly never-ending lockdowns that it brought? The COVID-19 pandemic significantly impacted our whole lives. Many people who acquired the virus are still suffering from its longer-term side effects, and many of those who didn’t are also suffering due to it in other ways.
When it comes to businesses, the pandemic introduced shifts to various aspects of management and customer interaction. The KYC or Know Your Customer process is no exception. As the world adapts to a new normal post-pandemic, businesses today are actively embracing the evolving KYC regulations and adopting best practices for the sake of improved business.
Here are six key considerations for KYC verification in the post-pandemic era.
1. Adapting to Evolving Regulations
The regulatory landscape around KYC verification is ever-dynamic owing to the changing nature of technology and crime. Some jurisdictions have strict laws, while some have relatively flexible ones. While all these factors have always mattered, today, after COVID-19 the difference is much more evident.
Today, businesses must stay aware and up to date about regulatory changes in their specific regions as well as globally. Being aware of the global happenings helps to ensure that your KYC procedures comply with the latest regulations. This involves the implementation of customer due diligence (CDD) for high-risk customers and the adoption of new technologies for identity verification.
2. Prioritize Your Customer
In a competitive environment, the customer is all that matters. Customers have the final decision in whether they choose you or your competitor. Thus, a seamless and comfortable customer experience is essential for businesses to attract new customers as well as to retain old ones.
A smooth and efficient KYC experience is critical for building customer satisfaction and retention. Businesses must strive to find a balance between the external KYC verification requirements and a seamless user-friendly onboarding process. You obviously do not want an over-the-top easy and comfortable experience for the customer while compromising your KYC effectiveness and quality.
For efficient and seamless KYC verification, businesses can offer multiple verification methods that carry out the verification at the same time.
3. Leveraging Technology For Efficient KYC Procedures
KYC standards have remained roughly the same ever since their existence with minor amendments and additions in the larger regulations. Technological advancements offer powerful tools that help to streamline and enhance KYC verification.
Some of the technological tools available today that can aid in the expansion and enhancement of the KYC verification process include:
Digital document verification
Digital document verification is an upgrade to the manual age-old document verification method. Online document verification utilizes solutions such as OCR and AI to scan and verify the authenticity of documents electronically.
Biometric authentication
Biometric authentication is easily accessible and in common use today. Thus, adding it to KYC is a simple solution to build business and customer security. Biometrics as part of the KYC checklist uses fingerprint or facial verification as an additional layer of security.
AI for risk assessment
The use of artificial intelligence in data management and analytics is increasing. Since KYC verification involves dealing with hundreds of thousands of individuals, using it can be a smart way to increase KYC efficiency. AI can help to identify potential risks and allow for a more nuanced approach to verification as per individual risk profiles.
4. Embracing Remote Onboarding
The COVID-19 pandemic gave a push to the already rising trend of remote interactions. While it increased online work and study opportunities, the pandemic boosted the use of digital services in general too. With an increase in these digital services, remote KYC becomes essential.
Businesses must offer remote verification options and allow customers to complete their KYC checklist from anywhere in the world. Secure online platforms, digital data verification, and strong encryption can help to facilitate this.
5. Maintaining Data Privacy and Security
As our reliance on digital solutions builds up, the need for personal data privacy and security increases. Businesses need to increase compliance with regional and international data privacy regulations. These regulations include the GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act).
Data privacy and security can be maintained by implementing robust security measures that can help protect sensitive customer information. Furthermore, businesses can adopt transparent data privacy policies and obtain consent for data collection.
6. Continuous Improvement
With a continuously evolving tech scene, crime, and KYC landscape, a strong commitment to continuous improvement is essential.
Any business dealing with personal data or finance must regularly review and update their KYC verified checklist. This can help businesses reflect upon their practices as well as regulatory changes.
Conclusion
Via active consideration of these six key points, businesses can navigate today’s dynamic post-pandemic landscape confidently. By adapting to changing laws and regulations, prioritizing customers, and embracing technology, businesses can make sure to offer secure and efficient KYC verification to their customers and foster long-lasting relationships of trust with them.
