Complying with KYC regulations nowadays is becoming more and more relevant. In some cases, particularly in the financial industry, complying with the KYC requirements is mandatory, so businesses may be penalized if found to be non-compliant.
With the increase in KYC implementation, comes an increase in available KYC solutions. There are a number of notable identity verification software options available today. It is important for companies to find the software that works best for their business.
What Is KYC Software?
KYC software is specifically designed to help clients (companies and financial institutions) verify information about their potential customers. In order to prevent money laundering, identity fraud, terrorist financing, and other financial crimes, companies are required to complete an identity verification process known as ‘Know Your Customer’ (KYC).
Using a KYC software instead of manually checking all the documents saves the company money, time, and resources. With it, they are able to quickly verify relevant legal documents, as well as ensure that their customer is real and not a risk to the company.
KYC Software Benefits
The digitization of KYC has proven to be very successful. Not only does it keep up with the ever-changing methods financial criminals use to commit their crimes, digital KYC is also customer friendly.
KYC identity verification software allow customers to:
- Quickly and easily upload the documents that are required
- Complete the process remotely, anywhere, anytime
KYC identity verification software also benefits the company by:
- Streamlining the customer onboarding process
- Lowering abandonment rates
- Improving time and cost efficiency
- Storing customer data for continuous monitoring and record-keeping
- Reducing the compliance team’s manual workload
- Decreasing the risk of human error
How to choose the right KYC software
In the past, KYC regulations were intended only for financial institutions, however this has recently changed. Whereas financial institutions are obliged to comply with very strict KYC policies, companies that are not part of the financial sector are able to implement simpler KYC processes.
Due to this difference, there are several different types of KYC software available.
Different Types of KYC Software
Identity verification software
The most popular and regularly used one is identity verification software. This software checks the validity of IDs, Proof of Address documents, passports, etc. The goal is to ensure that the potential customer is real, their documentation is legitimate, and both match.
The complete KYC process software
For companies that have strict KYC guidelines to follow, this type of KYC software is the most recommended. Not only does it verify your customer’s identity, but it is also able to provide the company with more information regarding a potential customer.
‘Customer Due Diligence’ and ‘Enhanced Due Diligence’ are steps in the KYC process that deal with risk assessment. By using the KYC software to gather more information on the potential customer, the company is able to make a more informed decision.
Automated onboarding software is able to quickly check against PEPs and Sanctions registers – something that would be a very time-consuming task if it were done manually. Additionally, this software is also able to check political and media exposure.
Choosing a KYC Software
You can choose the best KYC software for you in three easy steps:
1. Familiarize yourself with the specific needs of your company.
What kind of KYC software your company requires depends on a variety of different things. Among these are:
- The daily volume of customer onboarding
- How big the company and its compliance department are
- Current automation to manual review ratio
What kind of KYC requirements will your company need to meet (standard, advanced, etc.)? What do you expect from the KYC software provider?
3. Define key issues for the KYC provider to handle.
Find potential issues and make your KYC provider aware of what those challenges might be.
Key Features of KYC Software
Choosing the right KYC software can be difficult. Here are some key features to look for in reputable KYC software:
- Security: You should always ensure that the software comes with the proper security measures.
- Company compatibility: There are several types of KYC software available, ranging from individual components like identity verification to more comprehensive end-to-end solutions covering KYC, AML, and anti-fraud. Discover which KYC software would best suit your company’s needs.
- Quick and easy integration: Search for a vendor that offers hassle-free integration; this is more cost-efficient and less time-consuming.
- Reference data connectivity: Ideally, the provider should have their own database, as well as the option to integrate other resources such as governmental databases, customer-specific data lists, etc.
- Advanced technology: A good solution offers ML, AI, and biometrics.
- Test the software: A sure way to evaluate the provider’s product is by testing it – try verifying both a legitimate ID and a fake/expired one to see whether the software is able to correctly identify the fraudulent document.
- Speed vs. quality: Weigh up whether the software makes onboarding easier and whether it meets compliance requirements. The best solutions are those that perfectly balance the two.
PXL Vision’s Identity Verification Solution
PXL Ident is an easy-to-use SaaS solution that guides your employees step-by-step through the verification process. It guarantees compliance with the KYC regulations in place and can be flexibly integrated into existing processes.
The ideal KYC software for identity verification should be accurate, user-friendly, and cost-efficient. PXL Vision’s solution provides all three in one!
Our IDV solution:
- Works with highly efficient AI technology
- Verifies your customer in only 30 seconds
- Accurately performs POI and POA checks
How does PXL Ident check documents?
Proof of Identity (POI) checks work as follows:
The customer starts the verification process, which is natively integrated into the whole KYC process of a company.
The customer scans the document with their smartphone camera.
The customer follows the onscreen instructions.
PXL Ident extracts information from the ID document.
PXL Vision’s technology identifies the document types and determines their authenticity.
Verification takes place.
Proof of Address (POA) checks work as follows:
PXL Vision’s identity verification solution implements an API from another service provider to perform the check. The result: regardless of a customer’s whereabouts, the POA check will be completed according to your country’s KYC guidelines.
Speed and Accuracy
PXL Vision’s process ensures that the verification process is carried out quickly and correctly:
- Check MRZ: We extract information from machine-readable code lines (MRZ) and run several checks on them.
- Examine the visual inspection zone (VIZ): We review the rest of the document or VIZ.
- Assess authenticity: We run multiple security checks and analyze hundreds of visual key features to ensure the document is legitimate.
- Read biometric NFC chip (if possible): This allows us to read information from the document. We also make sure to inspect the chip to confirm that no tampering took place.
PXL Vision also provides a backup guide on how to manually examine identity documents.
PXL Ident Benefits
PXL Vision’s solution:
- Helps your business to increase revenue by reducing dropouts during KYC-processes;
- Gives your clients a quick and user-friendly experience that can be completed anywhere, anytime;
- Is simple and easy to integrate, yet very reliable;
- Can be flexibly adapted to your personal needs and offers lots of configuration options;
- Is cost-efficient and designed to provide a high level of security.
What sets PXL Vision apart?
There are several other identity verification products/providers out there. Among these are:
- (veriff + onfido)
What sets PXL Vision apart is its ability to achieve the perfect balance between easy-to-use and KYC-compliant.
It only takes 30 seconds for the potential clients to verify themselves remotely.
It only takes two simple steps…
Our identity verification solution will not only save your company time but also increases customer satisfaction. It is reliable, user-friendly, and thorough.
How much does KYC software cost?
The cost of the software/provider correlates with the number of transactions on offer.
Is KYC software mandatory?
KYC compliance is mandatory for financial institutions, but only recommended for businesses outside the financial sector.
What is the difference between manual, paper-based KYC checks and KYC software?
KYC software allows customers more flexibility to comply with the requirements remotely. Digitization of the KYC process is less time-consuming and more effective.