Growth & Marketing

May 18, 2022

May 19, 2022

Common mistakes (and solutions) in KYC/KYB forms

Table of contents

Fintech is one of the fastest growing industries in the world. In recent years, many startups have been born trying to solve market problems with technology in different areas: banking, payments, loans, crypto, etc.

A common feature of all these companies is that they need their clients to pass a compliance process to verify their identity, whether they are individuals or companies. As the Know Your Customer (KYC) and Know Your Business (KYB) processes aren’t core for most companies, it’s easy to find improvement areas in the KYC/KYC flows, so here are 4 of the most common mistakes:

#1 - The monolith: a long form in a large block

It’s really frequent to find all the fields together in a form, one after another, without any other context. Leaving users in front of dozens of fields may cause anxiety and transmit the feeling that the process is endless. 

The solution: Separate the form into different steps

Try to group all the fields in different topics. For example, this is how a large KYB form could be grouped in different steps: basic information of the company, contact details, company owners’ profiles, and documents to upload

Apart from offering the user a better user experience, another advantage of separating the steps is that you can save the information in each step. In case the user can’t fill all the fields at once, it would be possible to continue from the last completed step.

#2 - Asking for too much data of the company

From the business perspective, the sales and marketing actions aren’t the same for every customer: they depend on their size, number of employees, sector, etc. So, in addition to verifying the information of a company, it’s tempting to ask for more information to define the potential customer’s profile during the KYB flow. But this practice isn’t recommended because the more fields a form has, the lower its conversion rate.

The solution: Use a data enrichment tool

Using a data enrichment platform, only the website or an email is needed to access all the public information a company has. For example, companies like Clearbit, Full Contact or People Data Labs are used to complete data records in real time with attributes such as annual revenue, funding raised, founded year or sub industry.

#3 - Request documentation by email

In a KYC/KYB context, it’s quite frequent to ask the individual or the company for a copy of several documents, such as an ID card picture, the ownership declaration or a proof of address. The problem comes when the documents are requested by email and not on the form, because it’s a really inefficient process: send an email, get the pictures and attach them to the CRM or whatever management tool. It sounds difficult and with risk of error.

The solution: upload the documents directly on the form

The best solution is to receive all the required data at once, including images or other attachments. This is why we really recommend adding an upload field to the KYC/KYB forms. Also, if you have to handle different combinations of documentation depending on the type of customer you have, this is also a good way to avoid human mistakes.

#4 - Manual ID verifications

In case all the required data is received correctly in a back office, there is still a time-consuming process behind the scenes: the one when a human verifies the information. For instance, checking the ID card matches the personal data provided in the fields by the customer manually is an inefficient process that a machine can do for us.

The solution: verify users automatically 

There are many tools in the market focused on verifying the identity of individuals automatically. One of the advantages of using one of these services is that users can easily go through the verification process from their phone by taking a selfie and a photo of their ID. If you are interested in learning more, you can check out Passbase, Onfido, Veriff, Persona or Cognito HQ.

As you can see, all recommendations are around automating manual tasks and easing the user experience. Finding a good balance between meeting compliance requirements and reducing friction for users will end up in better performance of your forms.

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