Do you remember when you had to actually visit a bank in order to open an account? The process usually involved making an appointment, sitting at a desk with a clerk, answering questions, submitting multiple documents and then signing multiple pages of a contract. To say that there was “friction” would be an understatement.
While some banks still insist on this in-person process, many have shifted to purely digital onboarding. And banks are definitely not alone – our lives have transitioned from being not just digitally-powered, but digital-first.
The internet is a vast, global playing field where companies of all shapes and sizes compete for customers and their attention. And as services become ever more streamlined and accessible, customers’ expectations become more demanding.
The issue of a customer’s digital experience is therefore of paramount importance to practically any company out there. And a customer’s first encounter – and potentially their most enduring impression – will be of your company’s signup process.
This presents a significant challenge for many digital companies that need to compete with tech giants such as Google, Meta and others in order to provide their customers/users with highly streamlined services. The bar for signup friction is high and it’s always getting higher.
The challenge for companies that are regulated and required by law to gather Know Your Customer (KYC) data on their users is even more extreme: how can you maintain customer engagement, reduce dropout rates and carry out effective KYC in the context of unrelenting user engagement demands?
KYC verification is always going to add a certain level of friction to a signup process: the question is, how to reduce that friction to the bare minimum, while also maintaining adequate protection against risk?
Luckily, there are answers that are framed on customer experience, and unsurprisingly, they’re based on new technologies.
One of the key challenges to carrying out effective KYC without negatively impacting customer experience is by ensuring each customer is treated according to their unique risk profile.
Risk profiles are a complex amalgamation of different factors that can include geo risk, online activity, jurisdiction, credit rating, age, their associations, and many more. The weight of these factors will also vary according to the onboarding company’s industry, location and business objectives and their risk appetite.
A key rule for designing a positive customer experience is to treat each customer individually. While it may seem like a daunting or even impossible task – especially for companies with large volumes of customers – by using some intelligent tools the process can be streamlined and effective.
This is critically important as it allows a company to fast-track low or zero-risk customers to frictionless onboarding, while processing higher risk customers for more detailed KYC and Enhanced Due Diligence (EDD) compliance checks.
In this way, low risk customers are not overburdened with unnecessary friction, while higher risk customers are only subjected to the checks that their risk profile demands.
Once a potential customer’s risk profile has been established, carrying out effective KYC in a way that complements – rather than compromises – customer experience, comes down to refining the KYC process.
This can be achieved by using technologies that include:
1. KYC Workflow Customization
A powerful tool for managing customer verification is a customized KYC Workflow Builder. This allows companies to make the user journey smoother by configuring the types of checks they carry out on different customers according to their jurisdiction, risk profile and what types of services they are seeking to access.
A Workflow Builder is a powerful tool that allows you to quickly and easily create custom workflows for your customer onboarding process. With a Workflow Builder, companies can add, remove or change the order of steps in your workflow, as well as specify the data and documents that need to be collected at each stage.
This intuitive process makes it easy for companies to tailor the customer onboarding experience according to each market’s specific needs to ensure that all the required information is collected. In this way, opening up services to new markets does not require a total re-coding of your KYC processes – it’s all accessible within the platform.
The Liveness Feature is a powerful tool that allows you to verify the identity of your customers in real-time. With a Liveness Feature, you can quickly and easily verify that a customer is who they say they are, automatically scanning an uploaded selfie or image capture with an uploaded identity document.
Last year, KYC-Chain implemented Passive Liveness, which is able to detect whether an applicant is actually a real person – and not a fabricated image or ‘deepfake’ – based on a single selfie image. Passive liveness operates by working in the background during an onboarding process, automatically verifying the presented applicant’s face, which is then cross-checked with their uploaded identity document.
In addition to delivering high accuracy, our passive liveness approach is imperceptible to fraudsters – which mitigates their ability to develop future hacking techniques – and is completely frictionless for users.
Passive Liveness does not prompt customers to follow awkward cues to move their faces in certain directions etc, so friction is considerably reduced when compared to the previous generation of ‘Active Liveness’.
3. Automated IDV
Automated Identity Verification (IDV) is a process that is used to carry out automated checks on uploaded identity documents. IDV uses technology such as OCR Extraction to scan ID documents for their credentials and other biometric data such as an image.
These credentials are then checked against the information submitted by the customer, and are also combined with the captured images from Liveness to establish that a customer is in fact the person on the submitted ID document.
For higher risk customers, these credentials are then checked against government databases and watchlists in order to ascertain if they are in fact a real person, and/or if they have been featured on lists of sanctioned individuals or entities.
Customer Verification: Elevating the IDV Experience
There are many factors that contribute to a customer’s IDV experience during their onboarding journey. As we’ve seen, having a dynamic and efficient KYC workflow that only subjects customers to relevant checks – and does so in a way that reduces friction to a minimum – should be a cornerstone of any KYC onboarding process.
The solution should also be fully Integrated with your website iframe and API in order to merge seamlessly with your business platform, and provide customers with a unified experience on your website or app.
In addition, there are other auxiliary measures that can be taken during the verification process that can significantly improve the customer experience, such as:
- Providing immediate feedback and prompts when information is submitted that is flawed or incomplete,
- Universal accessibility options such as voiceover functions, font resizing and
- Analytics that can show you where customer dropouts take place, and to provide input for ongoing improvements.
Are you looking for a way to optimize your customer verification and IDV experience that can merge seamlessly with your business model? Get in touch and we’ll be happy to tell you more about what KYC-Chain is capable of.