How a good KYC process can increase your conversion rate
You want to prevent fraud but are afraid that KYC can affect your conversion? Thinking that the anti-money laundering regulations will suffocate your business?
Implementing a eKYC procedure into your service will definitely affect your business, but what if we told you that it can and sure will be done in a beneficial way that reduces the time spent for manual verification thus engaging your customers with a higher conversion rate?
Usually, entrepreneurs are looking for a Know Your Customer procedure in order to comply with different regulations and standards by the numerous financial sector regulators such as FINMA or MAS. Caring of compliance to the legislation is of course important, but it’s the approach that really matters in the scope of conversion rate and the performance of your business. In order to fully utilize the potential of the eKYC — customer’s due diligence should never be an obstacle to your clients. One should carefully think of the customer’s journey and first of all decide at which stage the KYC should come into play.
Here’s a bad example: let’s assume there is an online payments service and pursuing the compliance to the legislation the management has baldly decided to embed a full KYC form straight at the registration. Such approach, of course, makes the onboarding complicated and time consuming, therefore is killing the initial vibe to use the service as a person will go and look for a simpler option. What’s the solution?
To begin with, a person who has already registered in the service will much more likely use it. In this particular case, KYC should be implemented gradually where, at the registration, user only has to provide basic information such as full name, age, gender etc. A client will start to get introduced with the service since they will gain access straight away, but certain features, such as actual transferring of money, will be unavailable until further actions taken in a form of pop-up windows or in their personal cabinet at the platform. This will allow to gradually build up the user’s profile and check their due diligence as they proceed further down the customer journey and only by the time it is actually necessary, perhaps when they’ve already filled the “send money to” form.
Another example: assume the enterprise is issuing debit/credit cards at the local branch and management is expecting clients to leave the building with the card at hands. How to ensure that the KYC is done in a way that a client doesn’t need to spend hours waiting for the identity check-up to be completed?
Here’s an example of the workaround by one of our partners in an instance when the law requires customer due diligence check-up and verification of the identity for financial interactions. The onboarding is performed face-to-face in a branch and it is expected that a client is able to provide necessary documents on the spot as it is standard in the field. The modern technology for automated KYC allows to get results of the AML/OFAC/Sanctions list screening within a minute. After performing a quick scan for positive hits on such lists, if no matches found, a client provides all the necessary documents for the verification and receives the card straight away. The documents and identity verification are then performed during a standard card activation period. If the verification approves the client — the card is activated as usual and the client doesn’t even notice the fact that the verification has taken place. In case of any reasonable doubt regarding customer’s due diligence found, a request for the update/rectification of the data and/or documents provided is sent to the partners.
In conclusion, we are always thoroughly working through case-to-case scenarios that enable our partners to deliver the optimal customer journey with the minimal impact for a seamless user experience. It is crucial to understand that KYC allows to prevent fraud and has certain advantages. Partners ensure their potential customers are safe to work with while their clients understand that they are engaging into financial relations with a trustworthy business and other users. A secure outsourced eKYC provider with appropriate verification guarantees and data storage safeguards effectively contributes to the image and the impression of the company in the scope of public relations as well as greatly reducing the time/cost value for developing and maintaining an in-house system. All you need is to approach one of our onboarding specialists and we will be happy to provide you the best eKYC solution perfectly fitting the needs of your business.