Taking KYC beyond identity verification
Since 2016, our Harmoney platform has been delivering perpetual Know Your Customer (KYC) and end-to-end compliance to the financial sector. Throughout the years, we’ve noticed several common misconceptions when it comes to the true nature of KYC – especially as the field evolves under stricter regulations. In this blog, we shed light on what modern-day KYC actually entails and how financial institutions (FIs) can prepare for future changes.
Perpetual KYC involves more than one-time identity verification
The main aim of KYC is straightforward, yet challenging: to identify clients and minimise key risks such as fraud. The market is abundant with excellent software providers who position themselves as pure identity verification tools – many of which provide great value. (This is also exactly why our Harmoney platform integrates seamlessly with these specialised tools.) However, true KYC involves more than just one-time verification of personal or corporate identity when a potential customer registers with a financial institution. In reality, this initial step is part of an ongoing, perpetual process and comprehensive strategy to ensure up-to-date identity security at all times.
Keeping up with evolving KYC-related regulations
Know Your Customer is a catch-all term that covers numerous concepts and regulations, and their scope continues to grow. Regulatory standards are likely the most prominent factor that financial players must consider as KYC evolves. While financial institutions have always been subject to regulations aimed at preventing financial crimes, new layers of requirements – such as corporate sustainability reporting under the CSRD, overarching cybersecurity directives like NIS2, and anti-money laundering regulations like AMLD 6 – are pushing organisations to keep a tight check on their KYC practices and collect more extensive information from their corporate clients. This poses significant challenges – but below the surface lies more than just adhering to regulatory demands.
Additional holistic KYC advantages
At Harmoney, we take a holistic approach towards perpetual KYC, integrating it throughout the entire client lifecycle at various critical points. Identity challenges don’t simply vanish after the initial ID check and subsequent risk assessment. Continuous identity verification remains crucial in ensuring both efficient operations, risk mitigation, and regulatory compliance throughout every stage. Here are two additional key factors in ongoing KYC that go beyond classic risk management and fraud prevention:
Enhanced Customer Relationship Management (CRM)
Fully integrated perpetual KYC allows financial institutions to collect more detailed information about their customers, enabling the delivery of personalised products and services. By understanding customers' financial history, preferences and behaviour, sales teams can focus on clients that are most valuable to their business.
Continuous financial risk assessments and credit checks
Thorough and perpetual KYC checks enable financial institutions to accurately evaluate a customer's creditworthiness and financial stability. This information is essential to help compliance teams make informed decisions. Continuous assessment helps mitigate these risks.
How our integrated Harmoney approach helps financial institutions
The Harmoney platform plays a linchpin role in today’s multifaceted KYC process. Our modular, integrated approach allows financial institutions to add precisely the capabilities they need to cover their KYC risks, allowing them to concentrate on their business. Combined with seamless integration into existing platforms and tools, Harmoney ensures comprehensive compliance, giving complete peace of mind to all players in the financial services sector.
Harmoney offers a cutting-edge digital platform that streamlines intricate onboarding and compliance procedures, featuring automated screening functionalities. Interested in discovering more about our innovative solution? Reach out to us for further details!