You are convinced—automating your merchant Know Your Customer (KYC) due diligence process will greatly benefit your business. What now? How do you go from your current, manual processes to automation?
The first step is picking a vendor, and to do that, you need to clearly understand your requirements. Are you trying to improve compliance, or are you more focused on streamlining processes? Are you choosing between adding staff or implementing automation? Is tying your KYC data into a merchant underwriting management system a consideration? For merchant acquirers who are looking to grow, a solution that allows for scalability usually tops the list, along with speed, compliance, and consistency.
Choosing a KYC automation vendor begins with matching your business size and goals to vendors who can meet your requirements. While there is some natural overlap, KYC vendors can vary substantially in key features and benefits. Some are quite feature-rich with a price tag to match while others are more minimal. In order to not pay for features and data that you may not need, look for a highly configurable solution.
Everything in KYC should be a module that can be turned on or off. For example, if you’re based in Russia and a third of the data does not apply in your region, then you should be able to turn it off and not be charged. In fact, too much data can make things more complicated.
Here are a couple of common scenarios:
An increase in clients has forced a small merchant acquirer to consider hiring another full-time employee. Instead of spending $60K–$80K on a new employee, is there a solution that will allow them to handle the volume without the additional staffing cost?
With that question in mind, they proceed to look at the overall return on investment to estimate the cost of automating their KYC processes. After seeing the results, they decide to automate the KYC data aggregation and continue to manually apply that KYC data to the underwriting process. This decision eliminated 90 percent of the manual KYC grunt work, avoiding the need to hire another full-time employee.
A large merchant acquiring business has already hired three full-time employees to manage the large merchant influx and the associated KYC due diligence tasks. Since KYC has already drained most of their resources and has proven to be a bottleneck, they decide to automate this process with the goal of automating the merchant underwriting processes down the road. They understand that they cannot automate the merchant underwriting process unless they automate KYC first.
In our upcoming webinar—How to Pick a KYC Automation Vendor That’s Right for You—we will outline what to look for in a KYC automation vendor, how to tell vendors apart, and how to choose the right solution for your particular situation.
Register here: www.g2llc.com/kyc-beginner-to-pro-series