Today we explore one of the most crucial procedures in the financial field in onboarding matters. Learn how to apply a know-your-customer procedure to your onboarding flow with Arengu.
What are KYC and eKYC?
KYC stands for know your customer or know your client— a term extensively used in the financial field.
KYC is a series of procedures made by a company to know as much as possible about their users, in order to build satisfactory and long-term relations with them, but also to avoid fraud and misuse of important amounts of money. KYC is a mandatory procedure in many countries and it is regulated by the law.
eKYC stands for electronic know your customer — a term to describe the procedures described above, in an electronic manner for digital businesses.
Some of the procedures contained in a KYC strategy include user acceptance, user verification, risk evaluation, and monitoring user activity.
Where is KYC used?
KYC is generally applied in financial companies, both offline and online, in order to avoid fraud or illegal transactions of any kind. Know-your-clients techniques may applied to any sector where users need to be verified, but the following ones are the main fields of action for KYC:
- Banking and finance. This is probably the industry that uses KYC the most. It doesn't come as a surprise that this sector needs to apply elevated security and verification systems, especially in the moment of creating a bank account, executing investments or transferring certain amounts of money, among others.
- Airlines and hotel businesses. Companies of this kind may be interested in applying KYC techniques in order to verify users before they take a plane, for instance. This enhances security when customers check in or book a hotel room, among many other examples.
- E-commerces. Any e-commerce can benefit from applying KYC in order to avoid credit card information, bank information, stolen ID's and much more. Certain luxury ecommerces are more inclined to use these techniques, as regular security systems can run short for them.
- Online betting shops. Any online platform susceptible to important transfers of money is a good target for KYC procedures. Online betting shops or gambling sites can benefit from know-your-client approaches to avoid fraud or misuse of the benefits.
Know-your-client technique examples
Depending on the nature of the company, the procedures involved can vary greatly. For instance, techniques may vary in fintech companies versus a physical bank, since the interaction between the client and the company are different in nature.
- Face verification. Some technologies can scan the user's facial structure and compare it to an official identity document to ensure its veracity.
- ID scanning. This technique scans a picture of any official document and checks the authenticity of the information and the photo. This can be applied to an ID, a drivers license, a credit card, a passport, and so on and so forth.
- Fingerprints. Both in offline and online businesses, fingerprints can be used as an additional way to identify the customer.
- Geo-location. In some cases, geo-location can be determining to check if the user meets certain requirements.
How to add eKYC compliance to your signups
Forms are the very first step to identify users and gather personal information about them — name, family name and date of birth are some of the data you can ask. With a powerful eKYC form, you can present all the necessary fields your business needs in order to execute the transaction.
Arengu allows integrations with any third-party APIs, so you can easily connect your signup forms with your preferred eKYC system. If you're already working with a trustworthy eKYC company, Arengu can work as the backbone that integrates your forms with external systems of your choice, like your KYC provider.
In order to add KYC compliance to your forms, you simply need to call your know-your-client API and execute the action at the stage of the form that you prefer. As you can see in the image below, Arengu displays a broad list of native actions you can add to your forms. Still, even if you don't find a native action, you can build it yourself by adding an HTTP request. You can use this one to connect to your eKYC provider and integrate it in your onboarding process.
Why using Arengu along with your KYC provider
Building your KYC form with Arengu and your own eKYC
- Fast setup. Arengu is a low-code tool that several teams of your company can work with. Thanks to its simpler language and its sophisticated technology, you can create smart and complex forms in a simple and fast way. If you're looking to create a KYC form in a short period of time, or to save time on developing resources and maintenance time, Arengu is the right option for you.
- Flexibility. Arengu allows full personalization of your forms, but most importantly of the logic behind them. This means you can design the behavior of its flows, integrate other tools, add conditional logic and much more.
- Versatility. Arengu's stack-agonistic technology allows you to embed your KYC form in as many places and sites you need, regardless of the programming language or stack you use. All changes or modifications can be carried out at once, saving your team a great deal of resources.