When you first start your own business, the most common piece of advice you are likely to receive is to make certain that you understand your target market. This often refers to who your customers are from a demographic’s perspective, the challenges with which they are currently faced, and how their general buying behavior will influence the unique buyer’s journey associated with your organization.
You will spend months and months delving deeper into these aspects of your customers, seeking out insights, and crafting buyer personas. There is no doubt that all of this will come in handy. However, what most business owners and entrepreneurs come to realize is that this general knowledge about their target market as a whole just isn’t enough to ensure the success and protection of their establishments. What is more important is having the tools necessary to understand every single individual who wishes to utilize your company’s products or services online.
Enter KYC technology.
What is KYC?
The meaning of KYC is ‘Know Your Customer’ and it refers to the technology and process involved in verifying the identities of potential customers, along with any particular fraud risks that they may pose to your business. The basis of this technology lies in identity verification and uncovering important details regarding a customer’s previous financial behaviors and activities.
What are the Benefits of KYC?
The various benefits associated with embracing KYC technology for your business are as follows:
- KYC helps to provide peace of mind that all online transactions completed via your online portal are legitimate. As such, KYC aids in reducing the risks associated with fraud, money laundering, and other criminal activities.
- KYC can play a role in preventing legal problems, such as issues with tax.
- KYC confirms a customer’s credibility.
- Simply stating that your business utilizes KYC technology can aid in deterring would-be criminals from trying their luck.
Along with benefits for the business itself, KYC also promises a host of benefits for the customer. For example, they will know that they are dealing with a legitimate and ethical company if it is explicitly stated that the company utilizes KYC. A customer might also feel a stronger sense of loyalty towards a company that goes out of its way to protect their identity.
How can I Ensure KYC Compliance?
It is important to note that KYC technology can benefit all sorts of businesses, regardless of size or type. Having said that, KYC is a legal requirement for many other types of businesses, such as banks and insurance companies. The good news is that ensuring KYC compliance isn’t as difficult as one might think.
Firstly, you need to conduct thorough customer due diligence (CDD). From there, the next step will be to review your customer onboarding process and establish a comprehensive Customer Identification Program (CIP). It can prove much easier to find a reliable partner that will provide you with AI-powered identity verification services and KYC will usually handle all aspects of compliance on your behalf.