How KYC APIs Can Unlock Increased Efficiency Relating to New Identity Verification

KYC APIs: A How-To Guide to APIs for Identity Verification

Know Your Customer (KYC) processes are put in place to protect against fraud, identity theft and red-flag transactions. And while they’re crucial for creating a safe and secure banking environment, they can often be time-consuming and resource-intensive to complete.

Thanks to new technologies, KYC processes are becoming easier to manage. KYC APIs are creating new opportunities to streamline onboarding processes and automate ongoing monitoring and risk assessments. Using KYC APIs can save time, create safer and more secure financial environments for customers and be incredibly cost-effective.

But what exactly are KYC APIs and how do they fit within identity verification processes and requirements? Let’s take a look.

What is a Know Your Customer API?

First things first: an application programming interface, or API, is used to enable two software applications to share data and workflows. An API can pull information from a database, translate changes in one app to another and automatically trigger the next step in a workflow.

A KYC API is an API designed to speed up, automate and improve KYC-related tasks or procedures. KYC APIs integrate with external data sources, including government databases and identity verification services, to quickly and efficiently verify customer identities and ensure compliance with anti-money laundering (AML) regulations.

KYC APIs can be easily integrated into existing bank and financial institution systems by developers to enhance efficiency and productivity. API flexibility can also allow for custom-fit systems that align with the organization’s unique or changing needs.

Different types of KYC APIs include:

  • Document verification APIs
  • Biometric verification APIs
  • Address verification APIs
  • User screening APIs
  • AML screening APIs
  • PEP screening APIs

Unlocking New Identity Verification Possibilities in Real Time

Manually verifying customer identities can be a lot for internal teams to take on. In addition to being time-consuming, KYC verification and AML compliance requirements are difficult to keep track of. Mistakes are bound to happen — but with such high stakes, teams can’t afford to make them.

KYC solutions present a win-win alternative. With KYC APIs, banks and financial institutions can create an efficient authentication process, reduce risk exposure and deliver a high-quality customer experience. Here’s how.

Stay Compliant with All KYC and AML Regulations

Automating KYC verification processes eliminates human intervention — and with it, human error. Data added by customers is compared directly with verification services, reducing opportunities to re-enter data incorrectly or for information to get lost. Checks come back quickly and accurately.

KYC APIs also ensure processes and procedures are compliant with all KYC and AML regulations. Automating these steps prevents crucial checks (like Customer Identification Program procedures) from being accidentally skipped. All necessary compliance processes run smoothly and effectively, creating a more accurate and cost-effective KYC program.

Protect Customer Data

KYC processes require some of a customer’s most sensitive information, so it’s important to ensure that any validation procedures for risk assessment tasks keep that data secure. Using APIs instead of manual processes can keep data encrypted and protected from falling into the wrong hands.

KYC APIs can also automate ongoing screenings and risk assessments. More efficient red-flag detection can help banks identify politically exposed persons (PEPs) faster, minimizing fraud risk and ensuring all sensitive customer information is secure.

Automating tedious customer data recordkeeping can also ensure accurate information is stored and maintained within the organization’s system. Less physical paperwork means fewer opportunities for sensitive customer information to be exposed to the wrong person.

Streamline the Verification Process

Faster verification processes are beneficial for teams and customers. Customers get to unlock the full potential of a new account or service, and teams can rest easy knowing they’re not unintentionally exposed to risks or fraud while they wait for verification results. KYC APIs cut down on the time it takes to complete the identification process by moving each phase along faster and improving accuracy.

Proper API documentation can guide an organization’s development team through how to use and optimize KYC APIs to streamline their unique processes. Fintechs, banks and other financial institutions can leverage API flexibility to create an automated KYC workflow that delivers better, faster results.

Increase Scalability

KYC APIs make it so financial institutions don’t have to sacrifice quality in order to accommodate more customers. Improving new customer validation processes with automation means banks can handle a larger volume of customers without compromising accuracy.

And because APIs make it possible to validate identities online, it’s easier and more cost-effective for businesses to enter new markets. Barriers to entry (such as physical offices and in-person staff) are reduced, creating new opportunities for growth.

Automating with APIs also frees up team members to focus on more important or difficult tasks. Bank staff that previously spent their work time validating new customers can now focus on addressing customer challenges and improving the overall customer experience.

Improving the Customer Experience with KYC APIs

Banks and financial institutions aren’t the only ones benefiting from KYC APIs — the benefits are just as apparent to customers.

Prior to KYC advancements, customers needed to visit physical branches to submit the required documentation to open a new account. A process that should have been quick could potentially take hours. But with KYC APIs, customers experience an onboarding process that is smoother, more efficient and can be done from the comfort of their own homes.

Here’s an example of how KYC APIs can improve the customer experience.

A fintech organization is using selfie verification features to check the identity of a new customer. The customer takes a picture with their mobile device on their own time and wherever they are most comfortable. The KYC API can then automatically and securely send that selfie data to a verification source and get an automatic reply.

The customer verification process is complete without requiring an in-person visit, or in most cases, even communicating with support staff or a team member. And because the API works automatically and seamlessly, the customer doesn’t experience any friction or disruptions in the onboarding journey.

Improved customer onboarding experiences can reduce application dropoff and improve customer adoption rates — and a great customer experience can help a company build an unbeatable competitive advantage.

Generative AI

How to Protect Your Business in the Golden Age of Fraud and Disinformation

Know Your Customer API FAQs

How long does it take to integrate APIs into your KYC process?

The API integration setup will depend on how complex the existing system is and the intricacies of the new API workflows being introduced. Outdated systems may require some updating before APIs can be added.

Comprehensive API documentation and skilled developers can make integrating APIs into KYC processes fast and painless. In many cases, businesses can integrate and leverage KYC APIs in just a few weeks. API consultants and experts can also work with teams to help develop an implementation plan and provide additional support for a faster turnaround time.

Can KYC APIs assist with Customer Identification Programs and Customer Due Diligence compliance?

Yes! KYC APIs automate identity verification processes and due diligence checks to comply with Customer Identification Programs (CIP) and Customer Due Diligence (CDD) requirements. With KYC APIs, the burden of manual checks and verification procedures is eliminated, reducing the risk of human error and improving compliance records.

Are KYC APIs secure?

Yes, KYC APIs are secure. In fact, using APIs in your KYC processes can boost overall security and improve data protection.

To maximize security when using KYC APIs, it’s important to follow API documentation and guidelines to integrate the software into your setup appropriately. For example, some identity verification providers like Jumio offer SDKs that create an even more secure workflow because they control the camera during the selfie process, which helps prevent video injection attacks, deepfakes and other types of spoofing. KYC APIs may also require ongoing maintenance and updates to remain secure as software, processes and best practices change.

What types of identity verification functions work with a KYC API?

APIs can be used throughout the entire KYC process, including:

  • Document verification: Used to authenticate identification documents like driver’s licenses, passports, leases, utility bills, and more
  • Address verification: Used to check addresses against public records to ensure geographic jurisdictions and provide proof of residency
  • Biometric verification: Used to verify identity with facial features, fingerprints or voice
  • AML screenings: Used to check customer information against government-managed crime and terrorism databases
  • PEP screenings: Used to check customer information against Politically Exposed Persons (PEPs) databases
  • User screenings: Used to evaluate a customer’s likelihood of crime or fraud using various historical data points

Can KYC APIs help with anti-money laundering compliance?

Yes! KYC already plays a crucial role in anti-money laundering compliance — and APIs make it easier, faster and more accurate. With KYC APIs, businesses can automate and enhance critical AML compliance efforts, including:

  • Customer due diligence
  • Risk assessments using reliable data sources
  • Identity verification
  • Screening for sanctioned individuals or entities

Seamlessly Improve User Experience with Jumio’s KYC Software

Thorough verification and validation of a new customer is critical in banking and financial services. With KYC software and APIs, verification is easier, more efficient and more effective. The use of APIs makes it possible to improve existing verification workflows with automated KYC functionalities, improving both the employee and the customer experience.

Jumio’s KYC API solutions use AI, biometrics and the latest technologies to streamline onboarding and compliance processes, reduce the risk of fraud and other crimes, and create a better environment for customers. To learn more, just contact us, and we will set up a time to discuss how Jumio can help.

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