Category: KYC & KYB

Welcome to our meticulously curated KYC/KYB category, a comprehensive repository dedicated entirely to the multifaceted dimensions of Know Your Customer (KYC) and Know Your Business (KYB). As we stride deeper into the digital era, the procedures around KYC/KYB have emerged as a fundamental pillar, ensuring secure and compliant operations within the financial landscape.

The articles housed in this category plunge into the complexities of KYC/KYB, discussing its inherent challenges, potential solutions, and its indispensable role in the realm of identity verification. Our articles traverse a wide array of topics, ranging from the application of artificial intelligence in customer due diligence processes to the impact of regulatory shifts on KYC methodologies. These writings cover a broad spectrum of subjects, offering relevance to businesses and professionals operating within the financial industry.

As a leading industry player in the domain of digital identity verification, Signzy stands at the helm of innovation in KYC/KYB. Our cutting-edge solutions are engineered to simplify KYC, making these procedures faster, more efficient, and notably secure.

Regardless of whether you’re a compliance officer diligently maintaining regulatory standards, a fintech entrepreneur navigating the challenging waters of the financial industry, or simply an individual interested in gaining a deeper understanding of the evolving world of KYC/KYB, our category offers a treasure trove of information and insights.

We invite you to join us on this journey of exploration as we dive into the future of KYC in the rapidly evolving digital age. Our articles aim to enlighten, inform, and provide a well-rounded perspective on the significant role that KYC processes play in today’s digital financial landscape. Welcome to a world where knowledge becomes power, and compliance becomes simplified.

Onboarding

Optimized Digital Onboarding- An Essential Tool For Sales Boost

Posted on | by Signzian

Customer Onboarding is a crucial aspect of business development. But what executives miss out on is the fact that it can help their salesforce as well. 89% of customers reported that they would pay more for companies with better customer onboarding processes, according to a recent study by Forrester Research. 

Highly engaged customers buy 86% more than unengaged customers. Onboarding is an effective way to attract user interest. Efficient customer onboarding paves ways to develop a loyal customer base. Innovative institutions find methods to improve their existing systems. This article takes a look at how Digital Onboarding affects customer engagement and how we can use it to drive sales.

Customer Onboarding and its effect on Sales

New customers need a stepwise process to guide them to set up and use your product or service. Customer onboarding resolves this need. It takes the customer from the initial sign-up to activation of the product and use. This helps in delivering value as early as possible to the customer. Good customer onboarding ensures setting the TAT(turn around time) to a minimum while covering all the important information useful for the customer.

As each enterprise has different modes of processing, there are different types of customer onboarding. They are the following:

  • On-Site Customer Onboarding is the traditional form of onboarding. The customer approaches a physical store,office, or branch with proof of identity and other documents. The process primarily involves physical entities with a high TAT. A study from HubSpot cites 63% of customers finding this type of onboarding very inconvenient.
  • Hybrid Customer Onboarding uses the digital documents companies offer to the customers. These forms are filled in online and then submitted physically to the concerned office or branch. Even though an improvement upon the traditional method of onboarding, it is still far from deeming a convenience for customers.
  • Digital Onboarding of the customers is a completely digitized process. Customers do not need to visit an office or branch. They can complete the process online from any place of their choice. This does not compromise the safety, guarantee, or credibility. The process is also called Online Onboarding or Remote Onboarding.

Sales are influenced by numerous factors, but the onboarding process profoundly affects sales. What most salesforces miss out on is that closing a sale does not necessarily guarantee a completed onboarding process. It certainly does not guarantee the retention of the customer. The processes and services like customer onboarding following a closed sale are equivalently relevant.

A convenient, swift, and reliable customer onboarding process provides the customer with a delightful experience. It increases the chances of further business and retention. If the customer onboarding ensures all important data points are covered for the customer, later processes can retrieve saved information making them faster and easier to navigate.

In essence, customer onboarding helps improve the quality of obtained customers. It builds trust and preference among the customers. With almost all institutions digitizing their onboarding processes, the competition to improve customer onboarding is cutthroat. Improving even the slightest details in the onboarding process brings forth beneficial outcomes.

Challenges of Digital Onboarding

With the advancements in technology, it is clear that digital onboarding trumps conventional modes of onboarding. It is faster and more secure than its predecessor processes. Yet even digital onboarding has challenges to address and resolve. Some of them include:

  • The transition from physical to digital platforms
  • Minimizing friction in the process
  • Changes in Regulations
  • Avoiding technological stagnation
  • Data Management

Newer customers from older generations find it difficult to understand and process digital onboarding. The transition from physical onboarding to remote and online onboarding is difficult for individuals unfamiliar with newer technology. This demands attention from the onboarding platform.

In the age of information, most people will not wait for delays in processes. If the customers face friction in the onboarding process, they might abandon the journey. Drop-off rates can be as high as 75% during onboarding. It might even end up in customers opting for services from other providers. A churn rate of 5% is expected usually. As much automated as the process may be, there is always a chance of a need for manual intervention. The platform must keep this intervention to a minimum. These hurdles need resolution in the digital onboarding process.

The advancing technology demands that the installed process be updated. We can not expect to install an onboarding process and let it be. It requires constant updates and additional plug-ins to improve. This coupled with the frequent changes in regulatory guidelines ensures that we must avoid technological stagnation.

Many institutions incorporate KYC and AML processes into the journey. This makes it easier for the customer as the whole process will cover multiple requirements. The data is obtained more readily. The obtained data should be stored with high-security measures. This is to avoid all forms of fraud and scams.

Optimized Digital Onboarding- The Boon to Boost Quality Sales

Having a digital onboarding solution is not enough in the prevalent competitive ecosystems. Institutions need to up their games by giving customers the most seamless and fast onboarding journey possible. This is not possible without taking into account the areas of improvement a generic digital onboarding solution has.

Onboarding is not a hurdle for the business, but rather a kit of tools to improve the number of quality sales. If optimized aptly, digital onboarding will increase customer retention and in the long run, overall sales. This is possible only if certain factors are addressed and utilized. They include:

  • TAT- Turn Around Time
  • Processing Friction
  • Regulation Compliance
  • Automation Quality
  • Technological Adaptability
  • Security and Risk Management

A reduced TAT and swift processing encourage customers to begin the onboarding journey. It decreases the activation energy for them. Indeed, what once used to take days or weeks to complete with manual intervention is now done in hours or minutes with digital onboarding. But, even this is further reduced with optimization. Schmick APIs and resources do not just look good but do this. TAT is reduced with better user experience initiatives and quality technology.

User experience and interface design have advanced to an immense degree. This makes the processing friction during the onboarding journey minimal. Unnecessary and cumbersome steps in the process are eliminated without compromising any compliance guidelines. All regulatory compliance measures are updated and integrated into the system. Frequent changes in guidelines are not a problem.

Quality automation and adaptable technology ensure no unprecedented roadblocks. Good technology is good when it goes uninterrupted. With newer machine learning(ML) methods and artificial intelligence(AI), decision-making and rule engines are advanced. They help prioritize necessities and eliminate unnecessary steps.

To prevent fraudulent activities, efficient safety measures are installed. Security becomes a prime concern when the risk is high. Thus, good onboarding resources implement proper risk analysis and management. As all this will be monitored by authorities, compliance is most certainly uncompromised.

These factors drive the customer to establish a healthy and dependable relationship with the enterprise. It helps in customer retention and even newer customer acquisition. Sales increase in numbers when the effort to be invested is minimal. 86% of customers prefer a good onboarding experience over a detailed education on services after they have bought it. 63% of customers demand quality support post-sale and during onboarding. It is the reason they would even consider making the decision. It is also interesting to note that it costs between 5 to 2 times more to acquire a new customer when compared to retaining one.

Hence, a good sale does depend on what comes after. The cretaceous strategies of sales are behind. Customers are aware and demand good products and services with efficient support. A good customer onboarding process not only makes the customer feel good but independent. 

Benefits of Optimized Digital Onboarding

Some of the major benefits of Optimized Digital Onboarding include:

  • Reduced TAT- Processing time is considerably reduced
  • Minimal Processing Friction- With an emphasis on details, processing friction is minimized by eliminating unnecessary steps and procedures.
  • Improved Regulation Compliance- frequently changing regulatory guidelines are no longer a concern. Technology-based compliance is also updated and effective.
  • Quality Automation – State-of-the-art AI with efficient digitization helps improve the overall process.
  • Adapting Technology- All backend features are updated regularly to not fall behind in progress.
  • Fortified Data Security- Customer data is highly secure with quality safety protocols and data management. Sufficient focus is given for fortification.
  • Risk Management- All customer-based risk is managed with priority categorization.

How Can Signzy Help?

It is only sensible to conclude that mere digital onboarding is insufficient to meet today’s customer demands. More optimized processing breeds better sales results and overall experience. But then the major question follows, how do we select the right service provider for Digital onboarding and other processing that can help your business?

We at Signzy, can certainly help you improve your business. Being one of the pioneers in financial and regulatory technologies, Signzy provides you with resources that make processes easier. Our Digital Onboarding solution stays ahead of the curve with prime technology while maintaining a focus on sales boosts too. With an impressive quiver of products and services, we provide you with extremely customizable solutions. These include our suite with 240+ APIs and AI-based resources.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Cryptocurrencies

How Can KYC Secure Cryptocurrencies Transactions?

Posted on | by Signzian

With an expected growth projection of nearly USD 24 billion for the blockchain market by 2023, the industry is all set to an exponential start this decade. The terms blockchain and cryptocurrency have had a symbiotic evolution. This has rendered them nearly interchangeable in usage. Nonetheless, we must understand what exactly cryptocurrencies are to understand it’s challenging.

Cryptocurrencies are digital currencies with purchasing and selling value. They use an online ledger and cryptography for secure transactions. With over 10,000 types, they are proliferating in many exchanges and have an estimated total value of more than USD 1.7 trillion as of June 2021.

They use blockchain technology eponymously. This makes them the most modern embodiment of economic advancement. Considering the potential cryptocurrencies have in terraforming the global economy, understanding the associated challenges and improving upon them is essential.

Challenges In The World of Cryptocurrencies

There is an increasing preference for cryptocurrencies in global transactions. The primary reason is the minimal involvement of bureaucracy. A more decentralized approach to monetary interactions also helps. But this can be useful as well as risky. The major challenges are faced during onboarding and include:

  • Financial Fraud
  • Money Laundering
  • Terrorist Funding
  • Government Regulations

Fraud, Laundering, and Terrorist Funding

Cryptocurrencies are used worldwide. Their regulations are different and oftentimes vague than state-issued currencies. Fraudsters are keen on utilizing this as a loophole. It helps them conduct illegal and fraudulent transactions. Cryptocurrencies can be used for money laundering and in some severe cases even terrorist funding. This is a dangerous aspect and regulating such activities requires a careful approach. 

Fraudsters may use false identities, stolen identities, or even shell entities. They transfer money in the form of cryptocurrencies from one international government jurisdiction to another. If not regulated, the entire industry can become a plethora of financial fraud and danger.

Government Regulations

To prevent fraud, cryptocurrencies are traded with stringent guidelines from many governments and authorities. These strict restrictions can severely impede the ease and speed of onboarding customers. It will also increase the minimum activation requirement alienating potential customers and traders.

Cryptocurrency Exchanges require government-issued identification verification along with good financial credibility for their customers. This makes the initial onboarding process heavily cumbersome. If better methods are not explored, the result would be wasted potential clients for the Exchanges.

Verification and KYC

Novel methods are developed to combat financial fraud in cryptocurrency markets. These methods can reduce any money laundering activities and prevent fraudsters from misusing the resources. Brokers consider ways to reduce the risk involved in onboarding a new customer or trader. Methods to verify an individual while avoiding any financial fraud is given below:

  • KYC- Know Your Customer
  • AML- Anti Money Laundering Measures

KYC

KYC helps establish credibility for the customer. This is done by checking their valid identity proofs and other background data. With advancing technology, it is mostly digital. For an industry using blockchain technology, it is only sensible to have efficient digitization of this entire process. Quality digital KYC helps stop all fraudulent or fake individuals from transacting. Thus, the danger is averted and risk is reduced.

AML Measures

Government agencies place Anti-Money Laundering Measures to prevent any form of financial fraud. Many countries might not have specific guidelines for cryptocurrency regulation. But many a time they fall under stringent AML measures. AML is mandatory to prevent any form of massive money laundering. If not complied properly, today’s resources can be used even for terrorist financing. As a matter of fact, measures for CFT-combatting finance of terrorism is a priority criterion for many institutions.

How Signzy Can Help You with Cryptocurrencies Transactions?

The advent of technology is making cryptocurrencies create a revolution in the industry. This makes it all the more needed to identify and verify the participants in the industry. Procedures like KYC and AML will only be effective if the appropriate guidelines are followed. Along with which safety measures need to be imposed. Nations are heading forward with this in mind.

But the catch is that, how do you fulfill all the criteria of regulations and safety while maintaining an easy journey for each customer? This is what we excel at.

We at Signzy give you customizable APIs and other resources that help you conduct safe and compliant KYC, AML, and all other requirements you have. We will help you onboard customers and traders of cryptocurrencies onto your platforms with ease and safety. Our seamless UI will make the journey all the more engaging. With the numerous products, services, and resources in our arsenal, we can make your enterprise better.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Bankrupting terrorism with Best KYC and AML practices

Posted on | by Signzian

AML compliance has been at the forefront to fight the threat of global terrorism. No wonder Governments across the world take it seriously. In 2018, U.S. Bancorp agreed to pay $613 million in penalties for a faulty KYC AML check.

According to the American Banker, U.S. Bancorp had already provided for $600 million in its books, related to expected enforcement action by regulators. Not financial loss, such non-compliance erodes customer trust and confidence, too. Many times, the reasons for non-compliance go beyond intent. It is an operational issue.

For example, OakNorth Bank had disconnected screening systems. One team handled anti-money laundering checks and another handled customer screening checks. Its screening and continuous monitoring processes to determine if customers are a Politically Exposed Person (PEP) were in place for its savings activities. OakNorth Bank did not have an option. It had to integrate its current tech stack and condense data into a single view, for compliance.

Technology has created a world of extraordinary economic opportunity. It has connected businesses and customers over traditional boundaries of language and geography. On the flip side, it has also aided the growth of global terrorism and crime. This has increased the danger and complexity of doing business around the world. 

Businesses are under pressure to identify, assess, and comprehend exactly who they’re doing business with, to battle the international threat of terrorism and financial crime. Banks and financial institutions are facing this situation for KYC AML check.

KYC is a subset of AML

It is understandable that AML and KYC are often confused. It is partly because the two acronyms are used together in the context of compliance and financial fraud. AML is a broader discipline that encompasses KYC. Here is a quick capture.

AML

AML refers to the procedures taken by financial institutions and governments. It is to prevent and combat financial crimes, including money laundering and terrorism financing. In the fight against organized crime and terrorism, anti-money laundering (AML) procedures are an important part of any financial compliance program. According to the United Nations, between $800 billion and $2 trillion (2–5% of global GDP) is laundered each year around the world.

KYC

The process of authenticating a customer’s identification is KYC, or “Know Your Customer.” To use a company’s service, each client must supply credentials such as identification documents. KYC verification procedures assist with anti-money laundering. It gives a framework for financial institutions to meet ever-changing regulations. It applies to Fintech also. Because Fintech firms provide financial services, AML regulations need them to authenticate their customers’ identities before providing their services. This ensures they are dealing with legitimate businesses.

KYC AML check best practices

What is the need for KYC AML check best practices? How do you measure success?

The clear response is that you avoid a penalty for non-compliance with regulations. It also keeps laundered funds out of the financial system. Thus, protecting civil society from crimes.

Is the above enough? Should banks stop with the minimum compliance requirements? Are there methods to improve the business while complying with? There is value to leverage best practices that are dependable, efficient, and cost-effective.

Comply 100% to the Current AML Regime

AML compliance is the least minimum banks must achieve. Slip-ups invite hefty fines. Reputation also suffers. The cost of non-compliance far exceeds the cost of compliance. Banks can add value to this ‘cost’ function by getting more business insights out of compliance. Banks can make operational improvements with technology to comply better at a lesser cost. The current AML compliance regime in the United States covers the following.

  • KYC
  • Reporting – Financial institutions file currency reports and report suspicious transactions through Suspicious Activity Reports (SAR)
  • “Follow the money” thereby maintaining a paper trail by keeping appropriate records of financial transactions.
  • Internal controls in line with the Banking Secrecy Act (BSA)

A shared Know Your Customer/Customer Due Diligence (KYC/CDD)

The Signzy blog has written at length about KYC. The need for identity verification cannot be overemphasized. Rogue identities, false identities, and misrepresented identities, all can put paid to the proper functioning of the global financial system. KYC is the first and the most critical step, to prevent the entry of rogue elements.

Banks are expected to have a robust customer identification program. Banks should demand government-issued identification. They should also examine whether extra information is required. This information could include occupation, employer, and business affiliations. For low-risk customers, simplified due diligence is enough. But, in other high-risk cases, basic and sometimes enhanced due diligence (EDD) becomes necessary. This comes at an increased cost of business to banks.

Banks are pooling resources to tackle customer due diligence (CDD) requirements. Statutory bodies like The Financial Crimes Enforcement Network (FinCEN) are also supporting these initiatives. It seems logical. If one Bank has made all the efforts to KYC, other banks can piggyback. Such a shared KYC improves risk management and financial inclusion. This shared KYC can be executed in the following ways:

  • Centralized agency approach that pools KYC across banks,
  • Multilateral information sharing across banks,
  • A combination of the above

Customer data sharing guidelines and internal compliance requirements especially for global banks might hinder such initiatives.

Reporting and Audit

Approximately, $85 trillion was the global GDP in 2020. The United States accounted for almost one-fourth of it. It is a staggering amount of money. Banks and financial institutions are instrumental to money flows that eventually contribute to the world economy.

Imagine, keeping a track of billions of transactions that make up the world economy. It is a tall task. This scale throws up the following challenges.

  • Automation – Because manual steps for this sheer scale are prone to errors of omission and commission
  • Documentation – To maintain paper-trail to help ‘follow the money.’
  • Monitoring – To ensure compliance and proactive identification of high-risk transactions

Automation

It is virtually impossible to use manual methods to meet the sheer volume of compliance reporting and audit requirements. Other than feasibility, other factors emerge too – mistakes and time. Banks use AML software to automate all their AML compliance activities. The software also prepares them to scale compliance with the change in rules and regulations. Such software is custom-built with preferred vendors. Banks also develop this internally with their technology teams. AML automation software boosts speed, efficiency, and prepares the organization to handle increasing volumes of data.

Documentation

AML compliance features are designed to enable law enforcement agencies to pursue investigations for civil and criminal penalties if warranted. The features are detailed enough to provide evidence useful in prosecuting money laundering and other financial crimes. This requires institutions to collect, store and analyze large amounts of KYC data as part of the customer onboarding process. Additionally, there is the need to store data related to transactions in line with the typologies that form part of the law/guidelines. The overall idea is that Banks should be competent to furnish necessary information via reporting, or when called for. AML Software ensures that no transaction howsoever trivial goes unnoticed and undocumented.

Monitoring

Monitoring is a nightmare. Because it isn’t just compliance that a bank has to deal with. Internal risk measures are also at play. From a regulatory perspective, the activities that Banks have to monitor are broad. It includes,

  • Illegal activities
  • Suspicious transactions
  • Transactions above financial thresholds
  • Unusual activity

AML software can address most of the hygiene ‘black and white’ monitoring requirements. It is the ambiguous ‘grey area’ activities that need more sophistication. Machine learning models (ML) can come to the rescue here. ML models can continuously learn from structured and unstructured data, thereby flagging suspicious and unusual transactions. This will ensure proactive compliance and aggressive redressal of risks.

Correct False Positives

A Dow Jones-sponsored ACAMS [CAMS (Certified Anti-Money Laundering Specialist) is the global gold standard in AML certifications] survey done a few years ago reveals that false positives are one of the most challenging aspects of KYC AML checks for bank compliance teams. False positives are a drain on a bank’s resources in its pursuit to track down money-laundering criminals. It is not difficult to understand why false positives are a problem.

Historically, rule-based models in line with regulations, flag off customer activities. It is usually based on value and frequency. Money laundering criminals are far smarter than that. Soon, bank systems tend to lag in detecting suspicious behaviors by account holders.

Continuously evolving customer risk-rating models could be one way to solve this problem. Mckinsey proposed a framework on how banks can approach building their customer risk-rating models. The best practices proposed by Mckinsey include simple ideas like data quality and simple model architecture. The best practices also include advanced ones like network science tools. Mckinsey goes on to identify the maturity level of the institutions implementing such customer risk-rating models. The maturity levels – Horizon 1,2,3 – indicate the effectiveness and efficiency of the implementing institutions. Banks would do well to reflect on how they can move up the maturity curve in identifying false positives, thus boosting productivity.

Balance Customer Experience with Compliance

AML compliance is not a trade-off. It does interfere with customer experience. But, it isn’t something banks can de-prioritize. If a high-value customer’s transactions look unusual, that will need to be screened and reported. Even during the KYC process, it is important to manage customer expectations. Proper systems and trained personnel can help. Customer drop-outs are a fallout of such measures. Banks have to identify and invest in the right kind of digital onboarding software, to minimize dropouts. At the same time, banks should prepare to accept drop-outs as the intended outcomes of a larger compliance culture.

AML will evolve

Criminal interests will undoubtedly keep anti-money laundering professionals on their toes. A certificate program in anti-money laundering is a testimony to this. Over the last two decades, right from 9/11 to the credit crisis, AML has evolved for the better. New rules and regulations have gotten added to the AML playbook year after year. Banks in the US are exploring Blockchain technologies to stay ahead of the curve to balance the ever-increasing challenge of AML compliance and associated costs. 

AML proponents have claimed that AML related restrictions have been successful in enabling the fight against terrorism since 9/11. Critics however demand more evidence. Let the debate continue.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Written by an insightful Signzian intent on learning and sharing knowledge.

Revving Ahead With Digitization- How To Revolutionize Verification In The Vehicular Industry

Posted on | by Signzian

Introduction

Being the 6th biggest manufacturer of motor vehicles, the Indian Vehicular Industry is a behemoth with a $118 billion value estimation. The fact that this is expected to skyrocket to $300 billion by 2025 makes it an unleashed beast.

The current process of customer onboarding and underwriting involves multiple physical parameters with the in-person involvement of the client and the assigned agent. But with novel technologies and cutthroat competition on the rise, it is time insurers decide to upgrade their game. This article focuses on the current market of automobile verification, its challenges and the solution.

The Current Market for Vehicles in India

By 2021 India is expected to become the 3rd largest passenger vehicle market in the world. 2019 saw a 2.7% increase in production in the industry as compared to the previous financial year.

The industry is in a state of growth and it is the right time to take the initiative and utilise it. The current modes of processing can be upgraded with technology. This will help flourish in a cutthroat market like India.

The Primary Players In The Indian Vehicular Industry

There are numerous automobile companies competing in the Indian market. The top ones are:

  • With revenue of near Rs.300,000 Crore, Tata Motors Ltd. takes the lion’s share of the market. Tata currently has a 6.3% and 45.1% market share in passenger and commercial vehicles sectors, respectively.
  • Maruti Suzuki India Ltd dominates the passenger vehicles market with over 50% in market share. The Rs.83,281 crore revenue and a market cap of nearly Rs.200,000 crore is an impressive aspect.
  • Mahindra & Mahindra Ltd also holds a big chunk of the market with revenue heading over Rs53,000 crore and a market cap reaching more than Rs. 70,000 crore.
  • The two-wheeler giant Hero MotoCorp Ltd comes on top of its specific niche with 36% of the market share. The Rs 32,871 crore revenue and the 57,180 crore market cap is impressive for a primary two-wheeler manufacturer.
  • Other honourable mentions include Bajaj Auto Ltd, Ashok Leyland Ltd, TVS Motor Company Ltd, etc

What Are The Challenges Of The Industry

As is with most industries, the challenges in the vehicular industry also play a lot in parallel with the adoption of technology. Gone are the old days of physical processing of documentation and verification. With the advancing technology, the terrain is entirely changing.

Insurers must ensure that they can survive the peer competition. Technological services are available for verification and other related processes. But the coding required coupled with the complexity and unavailability of resources from a single portal is frustrating.

Why Is Signzy The Solution?

The solution to technological hurdles is not simply newer technology. It is the right newer technology. Signzy can provide this. With a quiver of products and resources, we can provide you with the state of the art technology while properly understanding your requirements.

Beginning with customer verification using OVDs such as driving license to the verification of the vehicle registration, Signzy’s plethora of APIs will suit you. APIs like DL verification API and Vehicle Registration APIs use government and other databases to cross verify the user’s credibility while maintaining the process seamless.

Since the Signzy portal is extremely customizable you can choose from the arsenal of APIs and other resources. This will help you avoid unnecessary roadblocks. The No-Code AI rule engine that we deploy makes integration and access easy and efficient. Signzy can make your verification processes seamless while maintaining the best security you can obtain.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

An identity verification service is for keeps

Posted on | by Signzian

Who are you?

Isn’t this the first question that comes to one’s mind when meeting a person for the first time? It is a natural question. In people’s conversations, a response is enough to close this question. But, it is different when dealing with institutions like Banks, Countries (immigration officers), and governments. Verifiable documentary evidence has to support the response. This is when an Identity Verification Service comes into play.

It doesn’t matter who you are. Documents must validate identity when dealing with institutions. A couple of years ago, a video went viral on the internet. It featured the tennis great Roger Federer. An usher at the Wimbledon center court did not allow Federer to pass without an ID document. For the record, Federer has won Wimbledon a record 8 times.

Businesses use identity verification services to ensure customers’ identity is true and accurate.

The identity verification service validates identity in the following ways

  • Using Government documents such as license, social security card, or passport.
  • Verify information from many sources – credit bureau or government databases.

Thus, identity verification service ensures successful KYC and Anti-Money Laundering (AML) compliance. It also reduces risks by fighting identity theft.

Your business may not have an identity verification service in place. It may already have one but is evaluating other options. Here are pointers to build a strong, successful, fintech, and sustainable identity verification process.

Compliance for an identity verification service

Law of the land still reigns supreme. Statutory and regulatory compliance is mandatory and no exceptions are advised for any identity verification service. On one end, there are KYC requirements that mandate access to identity, financial and personal information. On the other, there are privacy laws that regulate access to user-owned data. A paradox. It is this contradiction that identity verification service providers have to navigate.

KYC

In 2002, all financial institutions made KYC mandatory in the US. This was due to the USA Patriot Act of 2001, which came into being after the 9/11 tragedy. All KYC processes have to adhere to a customer identification program, called the CIP. The CIP also forms part of the institution’s anti-money laundering (AML) policy. Banks and Fintechs leverage KYC to assess customer profile and consequent risk.

Privacy Laws

On 25 May 2018, the European Union (EU) put a privacy law into effect – General Data Protection Regulation (GDPR). GDPR brought to the forefront the entire debate on data privacy. ‘User consent’ is the cornerstone of GDPR giving tremendous control to the user. The user now has the power to manage data – active and passive – that the user shares with other parties. The US too has many privacy laws, but none at a central federal level, unlike the EU’s GDPR. The Californian Consumer Privacy Act (CCPA) is often the most talked about and the most recent.

Be aware of legal requirements before zeroing in on an identity verification service. Adhere to all laws including KYC, Anti-Money Laundering (AML) regulations, and privacy. Violation of laws could invite major penalties or financial jeopardy.

Fraud Protection

The leading identity verification company Idology published the eighth “Annual Fraud Report 2021.” It says leaders call identity verification, the number one challenge in addressing fraud. It is not surprising. Covid-19 accelerated digital transformation initiatives across organizations. Identity verification was one of the top use cases. This at a time when incidents of fraud – financial, data breaches, identity thefts, and mobile fraud plays – are at historical highs.

Technology

Without technology, no identity verification service would be possible. The options are discussed below.

Optical Character Reader (OCR)

The world is still far away from complete digitalization. Most documents including those related to identity are still in paper form. OCR transmits the data from paper to electronic portals. OCR scans, recognizes, reads, and extracts written information from an identity document. It then verifies if the identity card submitted by the customer is legitimate or not. This allows customers to verify their identity through smartphones. OCR collects data from documents and encrypts it to follow regulations and reduce fraud.

Biometrics

Your smartphone asks for your fingerprint or your Face ID to unlock. Biological markers are impossible to replicate. These markers are best placed to customers into a password. 

Biometrics goes beyond face id recognition. It could extend to DNA matching, iris scan, fingerprinting, voice, and even typing. Biometric identification captures and corresponds to people’s unique physical features/behaviors. Thus, it lends strong confidence to a business’s approach to identity verification.

Blockchain

Following the crypto-mania? The Bitcoin frenzy has overshadowed the technology that powers crypto – Blockchain. Blockchain is powering a broad range of applications from trade to music and even voting. Yes, voting in elections. Identity management is using blockchain too.

The beauty and strength of the blockchain are that it restores the right to privacy to the user. It is the user who decides what personal identity information to share. Thus, fintech balance the challenge of ensuring compliance while adhering to privacy laws.

Blockchain is a digital ledger of decentralized data. It lends itself well to solve the use case of identity verification. Consumers assign a digital identity or watermark for all transactions. They then decide which information to share. This makes the process speedy, convenient, and risk-free for both parties. Thus, leveraging blockchain technology can ensure that digital compliance is convenient yet secure. Digital identity verification solutions including Signzy are also utilizing blockchain to audit transactions.

Artificial intelligence (AI)

AI impacts identity verification in the following ways,

  • Replace the human in performing all mundane tasks e.g. physical verification of paper identity documents.
  • Quick real-time verification of captured information with a trusted database either public or private.
  • Fraud detection and prevention.

Artificial Intelligence (AI) fastens the identity verification process compared to humans. It also resolves the biometric issues related to aging, makeup, and facial hair. AI-driven platforms leverage artificial intelligence algorithms. They verify a selfie and a photo ID for a swift and accurate identity verification process. AI accepts many identity card formats and uses the selfie for more authentication. AI conducts real-time authentication with geolocation, IP address, and AML background check.

The technology stack supporting identity verification could start with one of the above.  The stack could also be a combination. The decision would depend on the requirements and the business’ capability maturity. The choice of the technology stack should address compliance, fraud, and user experience.

Awesome User Experience (UX)

Identity verification is fraught with friction. In most cases, it is a frustrating experience for the users. Most users seem to have developed ‘acceptance’ to a poor user experience. Even the smallest convenience offered comes out as a great user experience. Balance awesome UX with the need for compliance and also preventing financial frauds.

Factors to consider

The approach to delivering a great UX could be guided by the following factors.

Avoid human intervention as much as possible

Ever imagined what would happen if the number of customers increased by 10 times? Wouldn’t it be tedious for your staff to keep up with the onboarding process? Thus, it would lead to bottlenecks causing the process to slow down. Higher the number of customers, slower the onboarding process. It’s an issue that can be exacerbated. Hiring more employees could solve this problem but wouldn’t be beneficial. Deploying automation will prevent this problem. It will avoid time-consuming processes, human errors, monotonous and repetitive tasks, improving productivity.

Need for speed and seamless experience

Customers hate waiting. The more you make them wait, the higher are the chances of you losing them. Sign-up abandonment is a reality, even if related to ‘mandatory’ services like banking. Unfamiliarity with the processes can be uncomfortable and frustrating for the customers. This causes poor user experience, resulting in abandonment and even churn.

Set user expectations

Identity verification is never a one-step process. It has to involve many steps. Setting user expectations at the outset can help manage user expectations better. Resetting user expectations at every step will help build a relationship. Thus, leading to eventual success.

Quick Wins

The single most important element in improving UX is simplicity. Achieve UX Simplicity by doing some of the following.

Autofill or automate the capture

One can’t imagine the joy one experiences on seeing a 15 field form partially auto-filled. A helpful dopamine shot. The availability of public and private databases of information can improve UX and cut errors of omission and commission.

Ask easy to remember information

Instead of asking the entire 9 number social security number (SSN) asking for the last 4 digits could catalyze action. Similarly, asking for information progressively (i.e. step by step) instead of all at once could reduce friction.

Fallback

Not every user who fails verification is a fraudster. Legitimate users may also be unable to verify ID because of genuine reasons (patchy internet, poor quality camera). So as not to impair UX, the system should provide for a fail-safe fallback including a manual process as the last option.

It is all coming together

Digitization will continue to grow. Institutions will juggle many factors in implementing identity verification solutions. Compliance will, without doubt, be the overriding factor in setting direction. E.g. The current COVID-19 pandemic is exerting another layer of verification for people’s movement. The continued growth in mobile users is making awesome user experience hygiene. UX should be as simple as ordering food on mobile, if not simpler. It is up to technology to do the tough balancing act between compliance and UX. It will be interesting to witness the future of digital identity verification. It will include compliance, mobile identities, cross-border imperatives, and artificial intelligence. Get ready for a machine soon asking you, “Who are you?”

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

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