Regardless of your field of interest, if you happen to be a digital entrepreneur or any online enterprise, you need to know how to create and maintain an effective and fully compliant (KYC) onboarding function.
The implementation of effective client onboarding functions plays a vital role in creating strong first impressions with new clients as well as lasting relationships … this element simply cannot be underestimated. It helps to increase overall operational efficiency by facilitating onboarding of new clients (or personnel) time and time again and aid in filtering the good clients from the fraudulent ones.
If you are new to the concept of client onboarding, it can seem somewhat confusing. However, the KYC (know your customer) processes, client due diligence (CDD) procedures, as well as regulatory compliance, are all easy to understand and incorporate into your overall onboarding processes.
In a nutshell, onboarding is a process which is applied to bringing new clients or new personnel onboard (your business). Onboarding occurs during initial stages of the entire KYC process, forming a key stage of the ensuing business relationship between the business and the client or employee.
Know your customer client onboarding is a process and is divided into several stages:
Stage 1: Every client onboarding process begins with the gathering of relevant data and client identification documents.
Stage 2: Once the relevant information has been collected, the process of identity verification along with relevant data authentication begins. This includes in-depth background checks relating to previous financial transactions, previous employment and other activities.
Stage 3: Further investigation into the client’s history often occurs during this stage and is designed to detect any previous history of suspicious or fraudulent activities. Other areas of investigation could also include any activities that could be a red flag within the scope of Anti-Money Laundering (AML), fraud prevention protocols, or even previous involvement with Counter Financing Terrorism (CFT) investigations.
Stage 4: The resulting information is then analysed and, based on the findings, will be used to classify the client in one of three main brackets: low risk, medium risk or high risk.
Today’s digital market place is extremely competitive in virtually all sectors. By not creating an effective and efficient onboarding process that’s easy to follow, you risk confusing, frustrating and potentially losing your clients.
Your effective onboarding process should:
To really ensure absolute KYC compliance, collecting as much relevant data as possible is key. Know your customer or know your business (KYB) processes are designed to increase the efficacy of proper risk management as well as fraud prevention, increase your overall security, and ensure compliance with regards AML and CFT requirements.
Often the best way to ensure compliance and full client due diligence, is to call in the services of independent experts. KYC service providers specialise in ensuring proper CDD (customer due diligence) requirements are met. Using a professional company is often a great idea for smaller operations that simply don’t have the time or the necessary resources (extensive databases and so forth) to meet the stipulated KYC requirements themselves.
KYC procedures and onboarding are not strictly the reserve of the banking sector or financial institutions in general. Know your customer procedures are designed to enhance your risk management through proper fraud prevention measures and the verification and authentication of client data through effective onboarding functions.
Whether you happen to be an iGaming provider or any digital entrepreneur that makes online transactions available, increasing risk security and assisting with the global anti-money laundering drive is an absolute necessity. By following a few simple steps and tips, you can create an effective and efficient, fully KYC compliant onboarding process that works for you. Get in touch