Strengthening Your KYC Process: Why Process Orchestration is a Must
KYC is a critical process for businesses operating in the financial sector. It involves verifying the identity of customers, ensuring they are not on any watchlists, and monitoring their activities for suspicious behaviour. KYC is essential for preventing financial crimes such as money laundering, fraud, and terrorist financing.
Many businesses rely on third-party providers to conduct (parts of) their KYC processes. However, relying on a single KYC provider can be risky. In this blog post, we’ll explore why businesses should not rely on a single KYC provider and how process orchestration can help overcome the challenges of KYC.
KYC providers are not created equal
KYC providers offer different levels of verification, have different data sources, and use different algorithms to conduct their verifications. Relying on a single KYC provider means that a business is limited to their verification process, data sources, and algorithms.
Furthermore, some providers have better regional coverage for one area compared to other providers. This can lead to varying results when using different providers.
According to a survey conducted by Thomson Reuters, 61% of businesses use at least two KYC providers, while 12% use three or more providers. The survey found that businesses use multiple KYC providers to increase the accuracy of their verifications, reduce the risk of false negatives (accepted fraudulent customers) and false positives (rejected legitimate customers), and ensure compliance with regulations.
Process orchestration: the solution to KYC challenges
Process orchestration is a solution that helps businesses manage and automate their KYC processes. It involves integrating multiple KYC providers into a single workflow, allowing businesses to leverage the strengths of each provider. Process orchestration can help overcome the challenges of relying on a single KYC provider.
The two processes are so closely linked and mutually beneficial, that KYC orchestration can even be seen as a separate solution.
Leverage multiple data sources
Process orchestration allows businesses to leverage multiple data sources to verify a customer’s identity. For example, one KYC provider may have access to government data sources, while another KYC provider may have access to credit bureau data. By using multiple data sources, businesses can increase the accuracy of their verifications and reduce the risk of false negatives and false positives.
Avoid a single point of failure
Process orchestration also helps businesses avoid a single point of failure. If a business relies on a single KYC provider and that provider experiences downtime or a system failure, the entire KYC process is affected.
With process orchestration, businesses can switch to another KYC provider seamlessly, ensuring that their KYC process continues without interruption.
Leverage multiple data sources
Process orchestration allows businesses to leverage multiple data sources to verify a customer’s identity. For example, one KYC provider may have access to government data sources, while another KYC provider may have access to credit bureau data. By using multiple data sources, businesses can increase the accuracy of their verifications and reduce the risk of false negatives and false positives.
Avoid a single point of failure
Process orchestration also helps businesses avoid a single point of failure. If a business relies on a single KYC provider and that provider experiences downtime or a system failure, the entire KYC process is affected.
With process orchestration, businesses can switch to another KYC provider seamlessly, ensuring that their KYC process continues without interruption.
Improve efficiency and cost-effectiveness
Process orchestration can also improve efficiency and cost-effectiveness. By automating the KYC process and leveraging multiple KYC providers, businesses can reduce the time and resources needed to conduct KYC checks. This can lead to cost savings and improve the customer experience.
Conclusion
In conclusion, businesses in the financial sector should avoid relying on a single KYC provider and consider implementing process orchestration.
By leveraging multiple KYC providers and automating the KYC process, businesses can improve accuracy, avoid a single point of failure, and reduce costs. At Atfinity, we offer a process orchestration tool that can help businesses streamline their KYC processes by integrating multiple KYC providers and involving their own experts.
Contact our sales team today for a demo of our software and see how it can benefit your business.
