The Good Tech Companies - How to Integrate KYC With Open Banking: a Comprehensive Guide for Finance Professionals

Episode Date: September 16, 2024

This story was originally published on HackerNoon at: https://hackernoon.com/how-to-integrate-kyc-with-open-banking-a-comprehensive-guide-for-finance-professionals. Streamline KYC with open banking to enhance compliance, reduce fraud, and simplify verification. A concise guide for finance professionals. Check more stories related to finance at: https://hackernoon.com/c/finance. You can also check exclusive content about #open-banking, #kyc, #fraud-prevention, #finance, #aml, #fintech, #data-security, #good-company, and more. This story was written by: @noda. Learn more about this writer by checking @noda's about page, and for more stories, please visit hackernoon.com. Know Your Customer (KYC) is a key component of Anti-Money Laundering (AML) laws, designed to prevent fraud, corruption, and terrorism financing. Open banking can streamline KYC processes through the use of application programming interfaces (APIs), which securely share data. This technology simplifies the collection of user information and verification of wealth sources.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. How to Integrate KYC with Open Banking, a Comprehensive Guide for Finance Professionals, by Noda. Open banking, while often associated with the banking sector, is a versatile tool with applications across various industries. One prime example of its broad utility is its integration with Know Your Customer KYC processes. This article explores howcustomer, KYC, processes. This article explores how open banking can enhance KYC procedures, offering significant benefits beyond traditional financial applications.

Understanding KYC-KYC, or know-your-customer, refers to the compliance practices that companies use to verify the identity of their clients. This process is crucial before onboarding to assess the risks of clients potentially being involved in illegal activities. KYC is a key component of anti-money laundering, AML, laws, designed to prevent fraud, corruption, and terrorism financing. KYC explains step by step. 1. Verification companies collect business-related information and personal details of potential clients, such as director names, business addresses, and social security numbers, along with supporting documents. This data is cross-referenced against public resources and government lists related to law enforcement, sanctions, and terrorism affiliations.

2. Risk evaluation After gathering the necessary data, companies assess the risk level associated with a potential client. If the risk is high, enhanced due diligence, ed, is required. Factors considered include sanctioned territories, politically exposed persons, PEPs, ultimate beneficiary owners, UBOs, non-resident clients, and cash-intensive businesses. 3. Ongoing monitoring KYC is not a one-time process. Continuous monitoring and regular updates are essential as company details, regulations, and verification methods evolve. This ensures compliance with changing legal requirements and maintains accurate, up-to-date data. How open banking enhances KYC Open banking can streamline KYC processes through the use of application programming interfaces

APIs, which securely share data. This technology simplifies the collection of user information, verification of wealth sources, and access to transactional data, leading to faster and more accurate data retrieval. Greater than, Noda's open banking solutions significantly enhance the KYC process by greater than providing seamless access to comprehensive transactional data and secure greater than digital identity verification, says Anastasia Tenka, Chief Operations Officer at Noda. By integrating our advanced APIs, businesses can quickly and greater than efficiently verify customer identities, reducing the risk of fraud and greater than ensuring compliance

with AML regulations. Benefits of integrating open banking with KYC 1. Access to comprehensive transaction data Previously, companies could only access limited transaction history. Secure API sharing provides a full view, including detailed transaction information, helping businesses analyze data and safely establish wealth sources. 2. Digitized data handling Open banking digitizes all KYC-related activities,

eliminating the need for physical documents and manual data entry. This automation speeds up processes, reducing time and costs, and enables quick risk evaluation and fraud prediction. 3. Streamlined verification Many open banking providers offer ready-to-use verification tools for onboarding. For example, Noda's Pay & Go KYC solution allows businesses to onboard customers with non-ID upload and liveness detection, covering the entire onboarding process efficiently. 4. Aggregated Data Open Banking APIs integrate KYC data into a single customer view,

reducing information silos and facilitating well-informed decisions. This integration simplifies access and enhances decision-making processes. Steps to integrate open banking with KYC 1. Define business needs determine your compliance requirements, including onboarding, additional verifications, and regulatory standards. Consider your budget to guide the selection of a suitable provider. 2. Choose an approved KYC provider research potential providers, evaluating their reputation, fees, and the specific open banking features they offer.

Select a provider with transparent pricing and a proven track record. 3. Integrate via KYC APIs Test the provider's services through a demo or trial period. If satisfied, proceed with detailed documentation and API integration, ensuring support from the provider throughout the process. Open banking is revolutionizing the KYC process by providing faster, more secure, and more comprehensive ways to verify customer identities and monitor transactions. Integrating open banking with KYC practices not only enhances security and compliance but also streamlines operations, reducing costs and improving efficiency.