Innovations in ID Authentication, KYC, Client Onboarding & AML
interview with:Tatiana Rozoum, Director, YouPass
1. How close are we to being able to access digital information about identity in a consumable and trusted way, across industries?
The financial sector is one of the most regulated industries. The regulated institutions hold trust of the regulator, of each other and of their clients.
In practice the quality of the client data is a competitive factor for industries.
However, there is no competitive advantage in using the client data for compliance purpose as far as it is limited to meet the due diligence obligations.
Furthermore, the traditional banks and FinTechs are more and more online channel and digitalization focused.
IMO, this turn illustrates the fact that the digital identity information will be accessible across industries earlier then expected.
2. Which technologies should organisations be looking into, to support their identity and KYC processes?
We need scalable solutions, which automate the process and make it real-time. FinTech has often several products where the technologies should offer flexible solutions.
Another valuable point in the tech solution is the cost of the client onboarding, which is part of the customer acquisition.
The adequacy of cheaper/faster is non compliant, is not true anymore. More and more FinTech companies prioritize their KYC process as much as their product. They are investing in building their own custom-made solutions, either buying it from the solution providers.
From the client perspective, better your process is for your client journey, less the client is frustrated and goes through faster. On the other hand, the firm avoids useless scoring risk alerts and human intervention. Decreasing the client onboarding cost.
3. Is the blockchain a complete solution for improved identity verification, or just part of a wider solution?
The distributed ledger technology, called blockchain, holds all the cards to meet efficiently the actual needs of the user data management. Several banks and FinTechs are adopting blockchain technologies to decrease the costs of the data management and to increase the processes automation. The technology consists in encryption of the information in the tokens recorded and shared by the P2P network stakeholders.
However the blockchain is not a database, but a powerful automated ledger enabling a transparency towards your clients and the authorities.
The complete transparency through the blockchain doesn’t make sense, because the technology is a turnkey solution for the data privacy by design concept established by the GDPR.
4. How can institutions ensure a user-friendly and compliant KYC and onboarding process?
The milestone is balancing compliant business practices and business growth. This happens on the C-level and governance level.
All the teams need to be educated on their level to understand how to apply a risk based approach. After being defined by the compliance, the onboarding process needs to be visited by each department. Here the marketing and technical team working together is essential to shape the best user experience. Finally, the tests on the different user profiles are compulsory. These are people who you are building the process for.
5. What are the challenges and benefits of putting in place a 'financial services passport'?
The benefit is the normalization. Especially when it’s done sector-by-sector.
On one hand, it helps firms to automate the process up to the certain level. On the other hand, it’s transparent to the client. The client doesn’t understand why the similar firms have the different documents or information collection procedures. The KYC process can be normalized and automated, even though, the risk-based approach is arbitrated by each party.
In any case the passport will not grant unconditional access to any service. Financial services activities are various; their clients’ profiles are more and more complex. In this sense, the KYC process has to be granular.
6. Why will you be joining the Identity & KYC conference, and what do you hope to get out of the event?
To meet professionals from different industries to share experiences on the way they apply technology for their customer enrolment process.