Process automation has become part and parcel of how modern companies function. A survey conducted by KRC Research found that 74% of respondents (comprising both business leaders and employees) thought part of their job could be automated. Whether it’s marketing, customer service, or budgeting, teams can choose from a myriad of software solutions to manage scalable and global operations. Where there’s a rule, there’s a way to implement an automated solution and identity verification is no different. But what happens when we need to verify identities and handle cases differently at a global scale for Web 3.0?
Let’s take, for example, a P2P money transfer app that has cemented it status in the US, but wants to test a foreign market like Canada. What at first seems like an easy way to increase revenue quickly runs into new compliance requirements following FINTRAC’s AML and KYC regulations. The process of handling documents and KYC requirements change again for the UK, Australia, and New Zealand. Even though most of these markets have similar AML regulations, being able to tune verification flows and requirements, such as adding additional checks, will make a difference to this company’s market entry, conversions, and ongoing customer relationships.
Customizable, not cookie-cutter, KYC verification flows are now essential to run a secure business that can scale globally today and remain trustworthy to every new market. A programmatic approach to verifying users’ identities enables businesses to differentiate themselves with great user experiences that do not compromise on security when scaling.
How current identity verification misses the mark
The early solutions for KYC emerged to fill specific AML requirements in finance and other regulated industries. These point-solutions solutions focused on performance for specific industries and were not designed for all the use cases in demand today. Individuals and businesses need reliable ways to facilitate online transactions that have deep offline implications, from online course certificates to valid licenses for unlocking a shared car. Applying best practices in verifying individuals — from AML in finance — to a new generation of user-centric KYC solutions can help all businesses identify their customers to secure their accounts against fraud and have seamless access to a service.
Legacy solutions require a long process to incorporate new verification flows. This might require specialized technical support that slows down product development. In the end, both the developers integrating solutions as well as the customers ultimately using them to verify their identities have more friction than is necessary. New solutions need to empower different teams, from compliance to engineering, to quickly set up and easily modify identity verification flows — not just for user onboarding, but throughout the customer life cycle at key touchpoints.
How verification policies and workflows increase expertise effectiveness
To develop leading services for Web 3.0, companies need tools to set up automated identity verification policies and workflows that meet industry, market, and user flow needs. Customer service teams can create sophisticated multi-channel messaging and chat systems with Twilio Studio. Ecommerce businesses can create rules for high spending clients from Shopify’s admin. Compliance, fraud prevention, and product teams should have similarly user-friendly tools to create their identity verification policies, customize the look and feel, turn on advanced tools like ongoing monitoring, whether for customer onboarding or to authorize a $10,000 transaction.
An effective identity verification program has to be intuitive to teams using them. Compliance should be able to add required documents, select countries served, and conditions for manual review. Having a user-friendly interface enables multiple stakeholders to join the process of creating, testing and deploying identity verification flows to optimize both security and successful verifications. KYC solutions that facilitate collaboration are essential for companies finding new ways to serve customers, reduce fraud, and navigate compliance.
Programmatic verifications with pre-set policies and workflows provide companies with infrastructure to scale their identity verification, compliance, and fraud prevention with business growth. Experts doing manual reviews can be freed up to handle flagged edge cases, enabling better customer service. This benefits the company by streamlining work processes, boosting efficiency, and giving all teams involved more time to devote to complex tasks that call for human ingenuity.
Moving from KYC checkboxes to digital identities for long-term relationships
Of course, end users ultimately benefit from more adaptable KYC solutions. In addition to having KYC checks at customer onboarding, verifying their identity again helps secure accounts. Passwords, and even 2FA, are not comparable to biometrics such as using one’s face or fingerprint for confirming a user’s identity.
With identity verification tools, companies not only have the opportunity to provide customers with an efficient client onboarding experience, but they can also set up additional logic to customize identity and access management processes. This can include requiring biometric authentication when account access is attempted from an unfamiliar IP address or when a customer wants to change their contact details to prevent identity theft and fraud. By implementing automated systems that proactively combat fraud, customers benefit from a secure online experience with digital businesses.
Whether it’s compliance issues related to the industries of Fintech and crypto, age restrictions for alcohol purchases and gaming, or increasing security for hospitality, identity verification is central to fostering trust and ensuring that compliance standards are met. A programmatic approach enables businesses to quickly adapt to regulatory changes and scale with ease, while simultaneously providing customers with a frictionless experience as they onboard and access various services and products. Creating digital identities that correspond to real-world identities may be the first step, but creating seamless verification systems where digital identities can be shared and verified is the foundation of Web 3.0.
If you’re interested in understanding how Passbase can support different KYC workflows, book a demo!
