RegTech solutions have been revolutionizing the way that organizations perform KYC verifications. The move to digital KYC processes translates into reduced compliance costs, significant time savings, and a better client experience.
In this article, we highlight the key benefits of digital KYC and show you how your business can harness technology to streamline KYC processes, demonstrate AML compliance, and ensure the protection of client data.
What is digital KYC?
Digital KYC is the process of verifying the identity of your clients and assessing their risk level with the help of digital tools. Digital KYC solutions allow organizations to automate sanctions and PEP checks, streamline the identification and identity verification of clients and beneficial owners, and optimize client risk assessments. This significantly improves the efficiency of the KYC verification process, reducing manual work and ensuring compliance with regulatory requirements.
Why are obliged entities shifting to digital KYC?
Banks, law firms, auditors, accountants, real estate companies, and other obliged entities are shifting to digital KYC to improve efficiency, strengthen data protection and AML compliance, and provide a more convenient experience to clients.
Increased efficiency through automation & third-party integrations
A digital KYC tool automates manual tasks such as PEP/sanctions checks, ongoing monitoring, and client and beneficial owner identification, streamlining these processes for greater efficiency.
Digital KYC solutions like Penneo KYC automatically retrieve beneficial ownership and client information from official business registers, conduct daily PEP and sanctions checks, and notify you of any changes in your customers’ circumstances.
Additionally, you can leverage the integration capabilities of digital KYC software to import client data directly from your existing systems, significantly reducing manual data entry and minimizing errors, while saving valuable time.
Improved compliance through activity logs, data centralization and guided client risk assessments
Digital KYC also strengthens compliance by guiding you through a series of pre-defined questions designed to assess the money laundering (ML) and terrorist financing (TF) risk levels of your customers. Penneo KYC has developed these questions in collaboration with local AML experts, ensuring that the risk factors align with national AML legislations in the countries where we operate.
All KYC data, including the client risk assessments and identity documents, are securely stored in the system, making retrieval simple when needed. Additionally, every action taken during the KYC process is recorded in an audit log, which can be used to demonstrate compliance to the authorities.
By adopting digital KYC verification, you can eliminate disorganized Excel spreadsheets and be fully prepared to prove your compliance with ease.
Data protection through end-to-end encryption
Many obliged entities still rely on insecure channels, such as email, to collect KYC data and documents from their clients. This poses a significant risk, as KYC data is personal information, and failing to protect it results in a breach of the GDPR.
KYC verification software ensures data security by using end-to-end encryption, allowing for the secure collection and storage of sensitive information, and ensuring that only authorized individuals can access it.
By investing in a digital KYC tool, obliged entities can fulfill their GDPR compliance obligations and prevent data breaches, safeguarding both their clients and their reputation.
Enhanced client experience through digitalization
Delivering a superior customer experience is essential, regardless of whether you are a B2B or B2C company. Clients today expect their interactions with your business to be seamless and convenient.
KYC verification software streamlines client-facing processes, making them more efficient than ever. Clients receive the KYC request and can quickly submit the required information and documents using any Internet-connected device, completing the process in just a few minutes.
By reducing friction in the KYC process, obliged entities can enhance the client experience, boosting satisfaction and improving their competitive edge.
Who can benefit from digital KYC?
Auditors, accountants, tax advisors, real estate agents, lawyers, banks, leasing companies, and other businesses that must comply with AML regulations can benefit from digital KYC. It helps these organizations save time, reduce costs, and improve data security while ensuring compliance with AML laws.
Penneo KYC: KYC verification solution for EU-based companies
Penneo KYC is one of the top KYC verification tools for EU-based companies. Over 600 obliged entities use Penneo KYC to streamline customer due diligence, perform client risk assessments, and securely store KYC data.
One such company is Complet Revision, an accounting firm based in Denmark. When the Danish Business Authorities visited for an inspection, Complet Revision demonstrated its AML compliance with the help of Penneo KYC.
Penneo KYC helped us a lot during the inspection. We were able to show that we collected the right documentation from our clients and stored it securely. Thanks to the activity log, we could also prove when the information was collected and document each step of the process.
–- Louise Jansen, Auditor at Complet Revision
Do you want to find out how Penneo KYC can help your business?
