With nearby nations unlocking the benefits of national digital identity schemes and consumers expecting Apple-grade experiences, UK KYC providers must turn to the ease and opportunities digitisation can offer. While the adoption of digital solutions might seem like a value-add, they may soon become regulatory requirements for KYC providers.
The UK Government has been steadily pushing the agenda for digital identity, with the recent Online Safety Act a significant milestone for online safety. With the volume of online transactions increasing, there’s a growing need for businesses to know with absolute certainty who’s on the other side of the transaction. The Digital Identity and Attributes Trust Framework from the UK Government and the passing of the Online Safety Act into law are crucial steps in this direction.
There has been a growing demand for document-free digital identification based largely on the following drivers:
By leveraging digital identification and document-free techniques, modern KYC providers can reduce the time taken in manual verification of documents, eliminate the costly errors that could inadvertently creep in, and improve data collection.
KYC platform providers need to keep up with the constantly evolving financial regulations . Adopting innovative digital identity verification solutions will help KYC businesses bolster their anti-money laundering (AML) and Fraud detection capabilities. Such solutions and the foresight they bring can help elevate the status of KYC platforms to AML risk and compliance advisors to organisations, rather than just being a vendor – ensuring sustained long-term revenue.
As the regulations get more stringent, there will be more KYC requests, and traditional KYC processes struggle to handle the digital economy's demands and scalability. The adoption of advanced digital identity verification solutions can streamline the KYC process.
Innovative solutions like bank-verified digital identity can be a strategic integration for KYC providers looking to scale up their operations. The OneID® solution uses the KYC and CDD checks banks have conducted on their customers at the time of the account opening. By leveraging the open banking framework, bank-verified digital identification, returns a pass or fail result on identity and age verification within seconds, on mobile, anywhere.
There are more UK citizens with a bank account compared to those with a document form of ID. Bank-verified digital identity leverages the most stringent and standardised source of data to verify individuals – the banks.
The changes in geopolitics and AML regulations need businesses to be certain of the individuals they are dealing with online. There will be more demand from businesses for perpetual KYC (pKYC) or ongoing KYC as they try to ensure they’re not being used to whitewash money from across borders.
Trigger-based monitoring ensures ongoing compliance, regardless of the customer's risk profile. KYC providers can enhance the efficacy of their offerings by setting up triggers like negative news and specifying thresholds for the triggers. However, carrying out pKYC could mean significant changes in the KYC platform's system, and it should be easy enough for end-users to do it repeatedly.
Whatever the solution, they’ll be judged on ease of implementation and integration for KYC providers and ease of use for end users. The ease of integration and implementation for KYC providers and the ease of use for end-users.
A truly digital and non-document-based identification, like bank-verified digital identity, can achieve all of this while also providing a slicker, frictionless customer experience and a more inclusive solution that covers everyone.
As the landscape of financial crime evolves, KYC businesses must adapt and innovate to stay ahead. The rising costs and complexities of compliance demand innovative solutions. In contrast, adopting perpetual KYC and innovative digital identity verification tools and practices can improve efficiency, risk management, and customer experiences. A robust, easy, and speedy solution like bank-verified digital identification can catapult KYC services and into the future and enable KYC providers to deliver the last mile in identity certainty.
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