Customer-first KYC: Key takeaways from Money 20/20 Europe

What's the least number of times you can have a customer prove their identity?

Fourthline Forrester TEI thumbnailBy The Fourthline Team
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With more people using digital banking than ever before, a premium user experience can tip the scales when it comes to winning over new customers.

There’s an increasing demand for frictionless and user-intuitive identity verification, and the onus is on the financial sector to deliver this for their customers and do so across national borders.

This year, the Fourthline team joined forces with thousands of other leading fintech experts to tackle these issues at the Money 20 / 20 Europe summit in Amsterdam. Fourthline CEO Krik Gunning took to the stage to answer one critical question: what’s the least number of times you can have a customer prove their identity?

What you should know: frictionless verification across the customer lifecycle

When customers are asked to manually input the same information repeatedly, it can suggest an inefficient process and lead financial institutions to duplicate requests and make errors. The chance that a prospect drops out of an onboarding process increases with each additional step that requires effort or time. Failure to deliver a smooth Know Your Customer (KYC) process can risk customer abandonment before you’ve even completed onboarding, resulting in lower conversion rates.

But verification doesn't stop at initial onboarding. Some customers can be asked to re-verify their identity at least four times, which can prove to be frustrating and time-consuming.

This is partly due to pressure from regulators to re-KYC every three to five years, which means banks are required to come up with new, innovative solutions to solve for this. Achieving those solutions requires a customer-first mindset that places user experience at the core of authentication.

For a bank-grade KYC provider and regulated payment institution like Fourthline, this means making identification for enteprises as effortless as possible. We do this by leveraging information across the customer lifecycle. The number of times the information is used within the lifecycle is then infinite - but the client doesn’t need to experience any friction.

Many of the forementioned challenges for enterprises come down to working around existing restrictions, such as disparate regulations and cross-border data flows. For example, in Estonia, it’s easy to request data validation from the local authorities. But in Romania, it may be much harder. There is a clear need for KYC solutions that work across different European markets.

Looking ahead, the evolution of the question: "how many times can you verify?" then becomes: "are enterprises equipped to verify in a way that is seamless for the user, and do so across different European markets?" Getting there means solving regulatory differences and executing locally compliant AML flows in different countries without compromising time, efficiency, and UX.

For regulated European companies, it’s important to take advantage of technology as responsibly as possible, with data quality and transparency playing a key role.

Regulators are hot on algorithmic bias, data quality, and explainability, and until they have a clearer grasp on the inner workings of these technologies, it’s down to financial organizations to scale responsibly and, critically, ensure they’re using systems with transparent, GDPR-compliant data flows.

The need to verify and truly know your customer beyond initial onboarding won't change anytime soon, and is becoming increasingly important across the financial sector. It's down to regulated enterprises to ensure they’re facilitating an experience that's as frictionless for their customers as possible.

Gabriele Rosati
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Get in touch with Gabriele Rosati, who brings years of financial industry expertise at Fourthline.