Common Challenges Facing KYC Protocols

Sep 27, 2022 | Blog, KYC

Do you have the right processes and protocols in place to protect against fraud, money laundering, and the many other risks that come with operating in today’s market? Know Your Customer and Customer Due Diligence, otherwise known as KYC and CDD, play a major role in protecting businesses and institutions—as well as their customers—from fraud, money laundering, and other criminal activities, as well as ensuring compliance with the many existing global regulations.

Identity verification and risk assessment are some of the best safeguards we have when it comes to stopping criminals from exploiting or misappropriating vulnerable networks, and with the help of a vetted software platform like iComplyKYC, you can move forward with confidence when establishing client relationships and protecting your assets.

Below, we’ll explore some of the common challenges facing modern KYC software, as well as the benefits of partnering with iComply.

False Positives

One of the most difficult parts of identity verification is perfecting the process and avoiding the hassle associated with false positives. While no program or protocol operates with 100% accuracy (as of yet), there’s no denying that false positives are incredibly inconvenient and costly to deal with for regulated firms. When an unsuspecting, genuine customer is falsely flagged as a risk—triggering EDD protocols due to an errant association with someone of the same name—it can cost significant time and money to properly investigate in order to stay compliant with jurisdictional mandates. Depending on your client base and what areas you serve, your organization could face the potential of numerous false positives routinely, each of which demands its own due diligence to resolve accordingly.

How do you circumvent such hassles? At present, there is no one method or program that offers a flawless performance, but implementing automated processes and partnering with a trusted KYC provider like iComply makes it easier to integrate routines that drastically reduce the time spent in review and save revenue in the process.

Find the Right Data

As any security analyst or risk assessor will tell you, not all data is created equal. In order to fully comply with global KYC and CDD regulations, your identity verification protocols need to pull the right kind of data from vetted sources. Whether you’re looking to run a basic background check on a customer applying to open a new banking account with your institution or needing to assess the risk of partnering with a Politically Exposed Person (PEP), you need to be sure the information you’ve gathered is as accurate and dependable as possible. Failure to do so can result in costly fines and drastically hinder your operations.

Did you know? iComplyKYC pulls from proven data sources and operates using edge computing to protect user privacy by conducting analyses right from the source device.

Missing Alerts

Incomplete data and/or poor processes can lead to missed alerts that leave your company and your clients open to unnecessary risks. When KYC is rushed or left to manual review, fact fatigue and minimal resources often lead to costly oversights that can have dangerous results for all parties involved. Your KYC and CDD protocols need to be able to keep up with demand without ever compromising the value and integrity of the data you gather.

Lackluster Reporting/Record Keeping

The ethos behind identity verification asserts that knowledge is power and retaining what we learn is essential for continued risk assessment and mitigation. Many KYC platforms and programs fall short where reporting is concerned, some in part due to poor practices and others to missing resources. iComplyKYC makes it easy to archive and access vital information when it matters most, with minimal delays or headaches in the process.

Rough Integration, No Future Development

KYC and digital security are constantly evolving realms, and in order to stay as safe and compliant as possible, your practices should be able to evolve fluidly with changing legislation. In addition, if businesses find themselves using multiple platforms and different software applications to try and achieve verification protocols, the results are typically just as disjointed as the KYC program is. Choosing a platform like iComplyKYC designed to seamlessly integrate with existing protocols helps to reduce errors and keep operations flowing smoothly while also ensuring you’re always on the right side of the latest standards.

We’ve Got Your KYC Bases Covered

Designed with the highest data quality and security levels in mind, iComplyKYC is proud to offer a world-leading solution when it comes to navigating KYC and CDD compliance. As one of the first providers on the market to offer a truly immersive, end-to-end experience for financial crime compliance, our robust suite of modular tools can be set up in minutes and configured to match workflows with the unique regulations of your jurisdiction, meaning that downtime is minimal and integration is as seamless as possible.

Learn how we do it by talking to our team today and booking a demo.

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