It’s no longer a secret that API banking is the future for banks, payments, and other industries interested in innovative financial technologies that enable agility and scalability. We have discussed the Core Banking APIs & Acquiring APIs in detail.
This chapter will cover what is known as Know Your Customer (KYC) APIs.
What Is KYC? Why Is It Important?
Know Your Customer (KYC) is the process that helps businesses identify and verify the details of their clients. This is one area where APIs are already having a substantial impact. Banks and companies use these APIs to ensure anti-corruption compliance and verify the identity of their customers or agents.
In short, it is all about verifying whether you are who you say you are. To help you better understand, let’s examine what it means to ‘Know Your Customer’ and how this process is carried out with APIs.
Know Your Customer With KYC APIs
KYC is a regulatory requirement for businesses that provide financial services to keep businesses or banks out of fraud and money laundering. Simply put, it is all about verifying the identity of customers before or when they start using financial services.
But how do businesses do that?
The older traditional process involved many sequential steps that had to be followed by an individual or team. Hours and hours of manual work would go into each stage, and a client could be off-boarded for risk reasons. The work is mandatory, and the labour costs will hit your bottom line, reducing your investment returns.
Now, fintech companies have made it easier for businesses and banks to do KYC without human intervention. Zwitch’s Verification Suite offers reliable KYC solutions through advanced APIs. Basic details like your name, date of birth, address, gender, mobile number, Aadhaar number, and photo identification are instantly available and reliable through KYC APIs.
Advanced APIs talk to each other and are great time savers while offering KYC cost-effectively. Those APIs integrated with Aadhaar-based eKYC can make the background screening process easier and faster. With no time wasted on manual entries, paperwork, or attestation, operations can be streamlined, and customer/ user onboarding can be done instantly.
Key Benefits Of KYC APIs
There are many benefits for banks & businesses who use KYC APIs.
No human intervention:
KYC APIs help in reducing human intervention at each stage. This integration of APIs minimizes the probability of errors at each stage.
Real-time insights:
KYC APIs provide real-time insights into customer risk analysis, credit scores, and many other parameters so that organizations can make the right decisions for each customer.
Zero risks of manual errors:
KYC APIs bring in the correct data at the right time and place, reducing the risk of clerical errors.
Cost-effective solution:
Integrating KYC APIs into your business flow will save you money and time.
Seamless onboarding:
Instead of undergoing a lengthy and time-consuming verification process, businesses can reduce and automate the KYC flow to create a frictionless onboarding process.
Better retention:
This frictionless experience results in a seamless onboarding experience and thus better retention.
Quick entry to new markets:
KYC APIs make it easy for businesses to enter new markets.
For all these reasons, KYC APIs have been introduced to the market. Traditionally, collecting data, compiling client profiles, and creating audit trails has been manual thus far, but these time-consuming processes can cost you a lot, including losing many customers during the initial stages of the application process.
You should now know about KYC APIs and where to find them. The next chapter will look at another popular banking API: Lending APIs.
