The Coronavirus Outbreak And The Digitization of KYC And CIP Processes
Prior to the coronavirus pandemic, the business ecosystem was serendipitously embracing the perks of the ‘know your customer’ and customer identification processes with occasional manual intervention. Most industries were at least partly utilizing the digital KYC tools to establish compliance.
But given how unprepared the world was for the covid-19 pandemic, the unorganized chaos ensued, suddenly placing businesses on a hotspot to scramble for reliable KYC solutions.
What the world did not expect is that the post-covid emergence would be giving rise to digital experiences. Even complex verification processes and due diligence procedures are finding solace in the digital sphere. An extension to this organized orchestra of identity validation is automation.
However, the pandemic has changed the way a lot of things function. This includes the functionality of the KYC and CIP procedures, which as we now know, are automated to meet the digital user experience criteria of the businesses.
The KYC and CIP procedures are customized and tailored to meet the specific criterion of the businesses and their targeted demographics. But this does not take away the fundamental focus of the process, which is identifying and validating the identities of the individual that wants to establish a business relationship with an entity.
The following will discuss in detail the trends through and after the covid-19 outbreak and how it has impacted the KYC and CIP processes
Rise in Economic crime during and post-pandemic era
A popular financial and economic crime survey shows that the economic crime during the peak of the covid-19 outbreak was at an all-time high. Many businesses had to temporarily or permanently hold their operations to sustain through the outbreak.
The lack of resources and the financial constraints put many businesses behind their predefined goals, leaving them scrambling for a sustainable solution that can accelerate and streamline KYC compliance.
Increased Demand for Digital KYC Compliance Solutions
KYC compliance solutions were a secondary priority for many businesses before the outbreak since no one was prepared for how bad things were going to get.
Market intelligence shows that health care, BFSI, and intelligence-dependent industries are more likely to incorporate identity verification solutions to validate and verify the identities of individuals and entities.
This has led to many emerging companies embracing the perks of automated KYC solutions, wherein the identity information of the incoming profiles (customers, vendors, associates, recruits, etc) are obtained and validated against the official records of the federal agencies, such as the SSA, IRS, OFAC, and more.
The initial due diligence gives enough insights to assess and understand the severity of risk, giving businesses the power of identity intelligence to make better decisions, ergo increased demand for digital KYC solutions.
KYC Automation in Play
KYC automation is another distinct trend within the business intelligence market, wherein businesses are looking at taking the KYC compliance and CIP procedures to the next level through the power of automation.
Identity intelligence solutions like Compliancely can be of great help in your endeavours to validate and verify profiles in just a few minutes.
Automation is the key to doing more, faster. Financial and banking institutions deal with hundreds of thousands of profiles every day. This means the identity validation tech stack has to meet these speed and performance capacities to deliver accurate, error-free identity verification results.
This means businesses are looking at not just digitizing their KYC compliance protocols, but automating the procedures to sustain in long-term capacities.
