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Regardless of your “field of interest”, if you own an online enterprise, or you are one of the digital entrepreneurs, you must know the right way to not only create but also maintain a fully compliant and effective KYC procedure.
Implementing effective and efficient client-onboarding functions will play an important role when it comes to creating a strong first impression with any new clients and developing lasting relationships. This is an element that should never be underestimated. It assists with increasing operational efficiency in the way of expediting onboarding for new personnel or clients, and a way to filter the fraudulent clients from the reliable ones.
What Is Client Onboarding?
If this concept is new to you, client onboarding may seem a bit confusing. However, the Know Your Customer (KYC) processes, CDD (Client Due Diligence) procedures, along with regulatory compliance, are actually easy to decipher and then implement into your onboarding processes.
A brief description of the onboarding process applies to bringing new personnel or new clients onboard to your business. Onboarding happens during the first stages of the KYC process, which forms the key-stage that ensures a business relationship is developed between a business and employee or client.
Here are 4 tips you can use to achieve a Fully Compliant Onboarding Function
Tip One: Gain a comprehensive understanding of how client onboarding processes work.
The client or customer onboarding process is broken down into multiple stages:
Stage 1: Each customer onboarding process starts with gathering client identification documentation and any other relevant data.
Stage 2: Once this relevant information is gathered, the next step of identifying verification and authentication of relevant data begins. This will include intensive background checks that relate to past financial transactions, employment history, and any other relevant activity.
Stage 3: Investigating the history of the client usually occurs in this stage. It is designed to pick up any history of fraudulent or suspicious activities. Other investigation areas can also include activities that bring up red flags in this scope of AML (Anti-Money Laundering), fraud-prevention protocols, and/or any involvement with CFT (Counter Financing Terrorism) investigations.
Stage 4: The information will then be analyzed, and according to the findings, it is then used to classify clients into 1 of 3 main brackets: high risk, medium risk, or low risk.
Tip Two? Why It Is So Important To Create An Effective Onboarding Process?
The current digital marketplace is highly competitive in just about every sector. If you fail to create an efficient and effective onboarding process, which is simple to follow, there are risks that arise that you could frustrate, confuse, and even start losing clients.
An effective onboarding procedure should:
Ensure an efficient and rapid onboarding process that allows for a way to onboard clients quicker and at much higher volumes.
Make sure that your business always matches up to every compliance requirement.
The design should result in positive user experiences, with fewer drop-outs over the process of application.
Tip Three: Collect All The Data That You Need
To ensure complete KYC compliance, you need to make sure you have collected all the relevant data that is needed. Know Your Business (KYB) or Know Your Customer (KYC) procedures are designed in such a way to increase the efficacy of the correct risk management along with fraud prevention, which increases your security, and makes sure you are compliant with AML and CFT requirements.
Tip Four: Contact The Experts
In most cases, the easiest and most efficient method to guarantee compliance along with complete Client Due Diligence, will be to hire independent experts. KYC service providers specialize in implementing proper Customer Due Diligence (CDD) requirements and that they have been met. Using one of these professional agencies is always a better approach for the smaller operations who might not have the resources or time (extensive databases and more) to match up to the stipulated KYC requirements on their own.
You may also like: Ensuring Compliance with Privacy Regulations
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