Understanding How KYC Providers Can Protect You and Your Clients

Nowadays, some businesses are already cautious in making transactions with their clients. They have consulted service providers and hired professionals to help keep their dealings legit, especially for financial institutions. Hence, they hire kyc providers to integrate a suitable identity verification solution for their system.

Different Types Of Know-your-customer Solutions

You must learn more about KYC or know-your-customer solutions to understand its essence to the business. It comes with various components that consist of varied methods and procedures.


The know-your-business solution is focused primarily on firms as a separate entity. For banks that transact with corporations, they must ensure that they integrate this type of security measures. It enables financial institutions to verify the agencies or companies they deal with are legitimate and meet the stated regulatory criteria.

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This customer identification program is the framework of the KYC system and establishes guidelines for ensuring the clients’ identities. When the customer provides their details, like age, birthday and address, it means they’re complying with the CIP. It is the simplest form of getting to know a client.

Electronic KYC

With eKYC, it is the integration of web services, digital technology, and databases. Such incorporation makes the entire process simpler and faster due to its automation. Firms no longer have to manually check the customer’s records and confirm them with the government’s documents. Moreover, the results are more accurate, provided that the initial encoding is error-free. 

Since everything is done through the internet, customers don’t have to physically visit the office. They can provide their info online, allowing a swift and smooth verification process.

The roles in various industries

Foreign exchange trading

When you talk about kyc providers and Foreign exchange, there’s a unique connection between them. The number of traders doing business in Forex is gradually increasing, and several brokerages are coming in and out every day. 

As the dealings spread dramatically all over the world, there are new policies created and continuous development of the old regulations. One of these rules includes KYC strategies wherein brokerages must perform thorough checks of their customers to confirm their identities.

Web-based lending firms

Online lending companies have surged for the past several years, giving numerous financial opportunities to struggling individuals. Sadly, some individuals engage in such dealings but only to scam or pursue fraudulent transactions. The emergence of web-based lending services has encouraged people to participate in a creative way to commit financial fraud. 

A typical security problem occurs in the application phase, where fraudsters provide inaccurate identities of other people. As a result, lending firms are left chasing ghosts, and the credit is left unpaid. Through KYC software providers, they can assess loan applications efficiently and identify potentially fraudulent transactions. Lending companies are fully protected from scammers and identity thefts.

Insurance companies

Many insurance firms have experienced scams that have considerably impacted their operation, clients, and reputation. Transactions may appear to be minimal, but when the values are integrated, it turns out it costs the insurance company millions or billions. 

The unsatisfactory implementation of KYC methods has brought these costly mistakes. Individuals are skilled enough to rob somebody else’s identity and make a claim to insurance firms. They can easily pretend and get a lucrative sum of the policy. Such dealings are costly and can dramatically tarnish the insurance firm’s reputation for a long time.