Buyer’s Guide: How to Find the Right KYC Solution for Your Company

Fitzwilliam Anderson
January 13, 2022

Finding the right KYC (Know Your Customer) solution for your business shouldn’t be difficult– but it is. With so many different KYC products in the marketplace, it can be overwhelming and confusing to determine which KYC product will help your business do its due diligence without breaking the bank or slowing onboarding times to a crawl. Fortunately, Prove is here to make securing the right KYC solution as painless as possible. 

We’ll start with some basics but if you’re already a KYC pro, feel free to skip to the 5 Questions to Ask When Shopping for a KYC Solution section.

What Is KYC?

In order to reduce fraud and prevent crimes, financial institutions are required by law to verify their customers’ identities during onboarding and periodically thereafter. In other words, the onus of responsibility is on the financial institution to ensure that customers really are who they say they are and that customers are not using the financial institution’s services to fund illegal activities.

While KYC checks work primarily to prevent fraud, anti-money laundering checks (AML) work to prevent organized crime syndicators, terrorist groups, and other criminals from using financial institutions to conceal the origins of illegally obtained money. 

When shopping for a KYC solution, it’s important to note that many products bundle AML and KYC checks. Prove’s no-cost KYC solution, for instance, contains both KYC and AML checks. 

Why Is KYC Compliance So Important?

Companies that fail to do their KYC due diligence risk steep fines from regulators. In 2020, financial institutions worldwide were fined a staggering $10.6 billion for regulatory non-compliance, including anti-money laundering (AML) and Know Your Customer (KYC) non-compliance.

5 Questions to Ask When Shopping for a KYC Solution

1. Is the KYC solution continually updated?

When shopping for a KYC solution, be aware that some KYC / AML products do not regularly update their data, leading financial institutions to fall into non-compliance. 

If you’re running an AML check, for instance, you will need to determine if a customer should be flagged as a politically exposed person (PEP). A politically exposed person is defined as “one who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.” Unfortunately, some KYC/AML solutions don’t update their PEP database, which means that your bank or financial institution may fail to properly flag a PEP. Remember, failing to flag a PEP is considered non-compliance and could lead to massive fines.

Fortunately, Prove’s robust data sources include:

  • 1,000+ of official sanctions, regulator, and law enforcement watchlists
  • 15,000+ PEP sources; checked for updates daily
  • Global Coverage: 200+ countries and territories in 14 languages

2. Does the KYC solution consolidate vendors?

When developing streamlined onboarding flows, the last thing you want to do is add unnecessary steps. After all, with every new vendor added to the flow, you add complexity and invite additional problems. 

Because Prove’s no-cost KYC solution includes Prove Pre-Fill, an AML check, and a KYC check, you can keep your onboarding flow as streamlined and efficient as possible by minimizing the number of vendors you work with. 

3. What is the impact of the KYC solution on overall onboarding times?

In today’s frenetic and fast-paced world, KYC solutions that slow down onboarding times will drive away customers and hurt business. Therefore, in order to stay KYC-compliant while also staying competitive, you should invest in KYC solutions that do not rely on expensive and time-consuming step-up procedures like ID scans. 

Prove’s no-cost KYC solution includes Prove Pre-Fill, a product that harnesses the power of phone-centric identity to actually accelerate onboarding times by auto-filling forms with verified data. With Prove Pre-Fill, forms asking for the required information to complete a KYC check will be automatically filled out with highly accurate data. 

Prove Pre-Fill leverages mobile and telecom signals to:

  • Auto-fill online forms with verified customer data from authoritative sources
  • Authenticate consumer identities to thwart account opening fraud such as synthetic identity fraud
  • Offer users a faster, more secure, and consent-driven sign-up process 

4. Does your KYC solution help your organization save money?

Implementing a robust KYC solution can be cost-prohibitive for many companies. According to one study, “A KYC and AML check could cost as much as $150 per customer when fully loaded for bank cost.” With Prove’s no-cost KYC solution, however, customers can employ a robust KYC and AML at no additional cost. 

5. What’s your KYC solution’s false-positive rate?

A false-positive occurs when a KYC check inaccurately flags a legitimate customer as a match to a sanction or PEP list, requiring the customer to wait until the inaccurate flag is removed prior to using the new account. While some false positives will always occur (no system is 100% accurate), high false-positive rates should be avoided because they contribute to high drop-off rates. 

Prove’s no-cost KYC solution results in a 70% average reduction in false positives, the lowest KYC false positive rate in the industry, and 95%+ match rates.

Interested in learning more about Prove Pre-Fill with no-cost KYC? Download our Product Guide for more information.

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